How to Improve Your Pay on Time KPI with E-Invoicing?

Paying invoices on time may seem straightforward, yet many organizations struggle to meet payment deadlines. The ‘Pay on Time’ KPI is critical for maintaining strong supplier relationships, optimizing cash flow, and avoiding penalties. However, approval bottlenecks, manual processes, and outdated invoicing methods frequently cause delays. If your organization is facing these challenges, it’s time to rethink your approach – e-invoicing, especially through Peppol, can be a game-changer.

The challenges behind late payments

Consistently paying invoices on time requires more than good intentions. Several key factors contribute to payment delays:

• Cash flow management – Sometimes, payments are intentionally postponed due to cash flow constraints and the need to prioritize expenses.
• Approval delays – Multi-step approval processes can stall payments, especially when key decision-makers are unavailable.
• Invoice discrepancies – Incorrect details, missing purchase order references, or mismatched amounts frequently cause delays.
• Manual processing – Organizations relying on paper-based invoices or PDFs require manual data entry and verification, increasing errors and inefficiencies.
• Invoice delivery methods – How invoices are received significantly impacts processing speed. Relying on PDFs via email can unintentionally slow down payments.

How invoice delivery impacts ‘Pay on Time’

The way invoices enter your system directly affects how quickly they are processed and approved. If improving your ‘Pay on Time’ KPI is a priority, eliminating PDFs and manual processing should be at the top of your agenda. E-invoicing, particularly via Peppol, is a proven solution that minimizes delays, reduces errors, and accelerates payments.

E-invoices via Peppol

• Automated processing – Invoices go straight into the system, eliminating manual data entry.
• Fewer errors – Standardized formats reduce disputes and discrepancies.
• Faster approvals & payments – A structured, digital process ensures efficiency.
• Compliance & security – Enhances regulatory compliance and reduces fraud risks.

PDF invoices via email

• Manual data entry required – Staff must extract and input data manually.
• Higher risk of errors & disputes – Missing PO numbers or incorrect amounts can lead to delays.
• Easily overlooked – Emails can be lost, filtered into spam, or buried under other messages.

The link between ‘Pay on Time’ and DPO optimization

Improving your ‘Pay on Time’ KPI also plays a key role in optimizing Days Payable Outstanding (DPO) – the average number of days your company takes to pay suppliers. Striking the right balance is crucial:

• Extending DPO strategically – Holding onto cash longer can improve working capital, but excessive delays may harm supplier relationships.
• Maintaining supplier trust – Paying on time while optimizing payment schedules ensures strong relationships without unnecessary early payments.
• Leveraging automation – Electronic invoicing and automated approvals help organizations pay at the optimal time – neither too soon nor too late.

By streamlining invoice processing, businesses can achieve both better cash flow management and stronger supplier relationships without negatively impacting DPO.

Take action: Transform your invoice process

Businesses that switch from PDFs to e-invoices see significant improvements in processing time and payment efficiency. If your organization is ready to enhance its ‘Pay on Time’ KPI, start by evaluating your current invoicing process and exploring e-nvoicing options.

Interested in learning more? Let’s start the conversation!