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Benchmarking

Overview

In general, business performance is about beating your objectives, trending in the right direction and doing it better than the competition. But with meaningful benchmark analysis, you can learn from the experience of others and apply that learning to making more informed spend management decisions. For example:

  • If you learned that, on average, 30% of spending requests are rejected, and your company is only rejecting 2% of requests, wouldn’t you want to consider implementing stricter spending approval policies, now that you have real data to justify this change?
  • What if you learned that, on average, turnaround time from requisition to approval took two hours, while at your company the average is three days? Wouldn’t you consider simplifying the workflow and approval routing process at your company so that employees can get the goods and services they need to do their jobs faster? How much administrative burden and expense would that eliminate?
  • What if you learned that most companies have at least three suppliers per commodity category where they take advantage of pre-negotiated discounts and where they conduct all transactions electronically? Wouldn’t you consider leveraging Coupa for streamlined electronic PO and invoice handling via the Supplier Network in order to save on transaction costs?

With Coupa you have access to critical benchmarking data that you cannot get with any other system!

Establishing benchmarks are really only as good as the data that's being collected. That's why Coupa's benchmarking capabilities is only built on real customer transactional data, not subjective surveys, but real information.

Below are a set of benchmarks that are tied to requisition processing. Take a look at your benchmarks in your Coupa service to see where you are doing better than the market, or where you can improve. 

Requisitions

Use these tips as a way to improve your procurement processes, and continue to save your company money!

Benchmark  Ways to Improve
Free Form Request
  • Expand categories and item lists
  • Implement more catalogs
  • Expand chart of accounts with spend / expense categories
Req to Approval Cycle Time
  • Remove unnecessary / redundant approval hierarchies
  • Rationalize approval limits
  • Increase self approval limits
Rejection
  • Introduce budgets
  • Require approvals above certain amounts / budget overspending
Self-approval
  • Reduce self approval amounts
  • Approval for budget overspending
RFQ
  • Require RFQs for certain spend categories
  • Have RFQ reference in the PO

Purchase Orders

Below are a set of benchmarks that are tied to Purchase Orders. Take a look at your benchmarks in your Coupa service to see where you are doing better than the market, or where you can improve.

Benchmark Ways to Improve
Avg PO Value Require PO for requests above certain amounts
POs Issued
  • Require PO for requests above certain amount
  • Stop issuing paper based PO
  • Do we have a case many blanket Pos -in that case, consider contracts
Active Suppliers
  • Encourage or even mandate suppliers to use Coupa to receive POs & submit invoices
  • Communicate that it is FREE for them + they get all the benefits of automation
PO Revisions
  • Rationalize your item list
  • Streamline PO approval, budget over spending limits
P-card spend
  • Lower the limit for p-card spend
  • Reduce p-card issuance
Orders processed per FTE
  • Stop issuing paper POs
  • Encourage suppliers to receive Pos electronically
Cost of Processing PO See above + rationalize PO approval limits

Invoices

Below are a set of benchmarks that are tied to Invoices. Take a look at your benchmarks in your Coupa service to see where you are doing better than the market, or where you can improve.

Benchmarks Ways to Improve
Approved Invoices
  • Stop processing paper invoices
  • Rationalize approval limits
e-Invoices
  • Stop processing paper invoices
  • Provide incentives for AP to process more invoices per FTE
Invoices Hold
  • Encourage suppliers to reference PO number and/or procurement contact on the invoice
  • Specify 2 -3 way matching rules
Release Holds See above
Non-matched invoices
  • Rationalize matching rules by supplier
  • Communicate matching policy to suppliers
Voids Encourage suppliers to reference PO number and / or procurement contact on the invoice
Invoices Processed per FTE
  • Stop processing paper invoices
  • Provide incentives for AP to process more invoices per FTE
Cost See above
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