2015 Electronic Accounts Payable Benchmark Survey Results
2015 Electronic Accounts Payable Benchmark Survey Results
Richard Palmer and Mahendra Gupta, RPMG Research Corporation

Survey Overview
The 2015 Electronic Accounts Payable Benchmark Survey Results (the “Report”) provide a comprehensive analysis of 870 end-users regarding the use of “electronic accounts payable” (defined in the survey as “non-plastic purchasing card accounts used to pay for goods and services after an invoice has been received; in other words, payment did not occur at the point of sale”).  Respondents to the survey represented public and private corporations (of all market sizes), federal, state, city, and county governments, college and universities, school districts, and not-for-profit organizations.  Currently, we estimate that 29% of purchasing card-using organizations have adopted EAP.   

EAP Spending Norms 
Benchmarking data within the Report covers a variety of program outputs for end-user program comparison.  For all EAP-using programs combined, key averages are:   
  • Monthly EAP spending per organization: $2.5 million (up from $1.1 million in 2012) 
  • Average EAP transaction: $4,842 (up from $2,359 in 2012) 
  • Monthly EAP spending per employee:  $258 (up from $136 in 2012)
  • EAP spending as a percentage of total p-card spending:  58% (up from 49% in 2012) 
EAP is primarily used for goods and services considered too expensive for payment with plastic p-cards (with an average transaction of $321).  One-half of all respondents had used EAP to pay for a single purchase in excess of $125,000 in the past year and one-quarter had made at least one EAP purchase in excess of $400,000.
Respondents report that about 47% of all EAP payments are for operating expenses (operating goods/supplies, office equipment/supplies, and computer-related hardware/software) and about 22% for assets (primarily inventory).  The remainder of EAP spending is spread across a wide variety of services (e.g., professional services and contractual repair and maintenance).

EAP Spending Growth
Seventy-one percent of respondents reported growth in EAP spending over the past year (at an average rate of 33%).  Annual EAP spending in the U.S. and Canada at the end of 2014 is estimated to be $65 billion.  With 72% of all respondents expecting an increase in EAP spending over the five-year period from 2015 to 2019, we expect annual EAP market spending to increase to $110 by 2019.  

Reported Benefits
Based on respondent estimates, paying with EAP (versus paying by check) results in a per-transaction cost savings of $22.  Further, on average, 51 days of working capital float becomes available using EAP based on typical invoice due dates, the time gap between payment by EAP and billing from the EAP provider, and payment grace periods.  With average monthly EAP spending of $2.55 million, there is additional working capital of $4.3 million made available due to the use of EAP, which yields $216,755 in additional yearly cost savings.
The value of EAP over other payment methods is recognized by the majority of respondents across a wide variety of payment criteria, including financial incentives for use, security of payment, and the quickness with which payment can be made.  EAP is also the preferred payment option when considering the ability of the organization to track supplier receipt of payment, transmit remittance information, control spending, and integrate with organizational software.  

Supplier Acceptance
Ninety-one percent of respondents had engaged in an effort to enlist suppliers to accept EAP payment.  Respondents indicate that in 2015 they paid about 17% of the organization’s supplier base with EAP.  Eighty-seven percent of respondents indicated that the number of suppliers paid by EAP had increased over the past two years (on average, by 21%).  Only 24% of respondents are satisfied or very satisfied with the current level of supplier acceptance.  Based on respondent estimates, if all suppliers that respondents desire to pay with EAP accepted the payment method, current annual spending of $65 billion would increase to $112 billion.  Organizations with a higher percentage of their supplier base accepting EAP payment report (a) significantly higher EAP spending, (b) a wider array of goods and services paid for with EAP, and (c) a significantly higher percentage of transactions (of all dollar values) paid with EAP.  

Best Practice
The 2015 Results examine best practices of \"high performing\" EAP programs.  The Report provides unique insight into the philosophies and actions of “best practice” EAP programs, broken into key categories that include: (1) leadership and strategy, (2) understanding of EAP benefits, (3) program management and control, (4) program policy choices, (5) supplier relations, (6) use of an expanded EAP toolkit, (7) provider selection, and (8) training and communications.

Interaction with Plastic Purchasing Cards
Eighty-nine percent of EAP-using organizations also use plastic purchasing cards.  Three-quarters of respondents assess that their EAP spending has had “little or no impact” on plastic purchasing card spending.
A comparison of similar-size organizations that only use plastic cards and organizations that additionally use EAP revealed that EAP-users report a 140% overall improvement in combined spending on plastic cards and EAP.

Other Areas of Interest
In addition, the 2015 Results provide additional details to support the topics above, as well as addressing a host of other issues, including organizational goals for EAP, category spending growth potential, program governance and risk management, customer satisfaction with the EAP product, and fraudulent use.

Benchmark Data 
The Results enable the reader to assess and find ways to improve their own travel card program performance by providing benchmark travel card program statistics by size of business, type of governmental unit, and industry category.  

A complete copy of the 2015 Results can be purchased below! Any further questions about the report may be directed to Professor Palmer at Richard.Palmer@RPMGresearch.net.

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