Invoice Processing
Accounts payable invoice processing from receipt to payment
FinanceLead Time
156.15h
Cycle Time
2.15h
Wait Time
154.0h
PCE
0.7%
Stages
7
Bottleneck
Manager Approval
Value-Add vs Non-Value-Add
Value-Add (VA)
An activity is value-add if it meets all three criteria:
- The customer is willing to pay for it
- It transforms the product or service
- It is done right the first time
Examples: Assembly, diagnosis, treatment, coding, machining, testing
Non-Value-Add (NVA)
Activities that consume time or resources but don't add value from the customer's perspective:
- Waiting — queues, approvals, batching delays
- Transport — moving materials or information
- Motion — unnecessary movement of people
- Rework — correcting defects or errors
- Over-processing — doing more than required
Note: Some NVA is necessary (compliance, safety). Target unnecessary NVA first.
Process Timeline
Value-Add vs Non-Value-Add
Bottleneck Analysis
Stage Efficiency
| # | Stage | Cycle (h) | Wait (h) | VA | Resource | Defect % | Efficiency |
|---|---|---|---|---|---|---|---|
| 1 | Invoice Receipt | 0.1 | 4.0 | VA | AP Clerk | 8.0% | 2.4% |
| 2 | Data Entry / OCR | 0.25 | 2.0 | VA | AP Clerk | 12.0% | 11.1% |
| 3 | 3-Way Matching | 0.5 | 4.0 | VA | AP Clerk | 15.0% | 11.1% |
| 4 | Exception Handling | 1.0 | 24.0 | NVA | AP Lead | 0.0% | 4.0% |
| 5 | Manager Approval | 0.1 | 48.0 | NVA | Manager | 2.0% | 0.2% |
| 6 | Payment Scheduling | 0.1 | 24.0 | VA | Treasury | 1.0% | 0.4% |
| 7 | Payment Execution | 0.1 | 48.0 | VA | Bank | 1.0% | 0.2% |