November 14, 2024
Definition
Law firms and vendors invoice legal departments for their services and expect timely payments. However, reviewing and approving invoices can sometimes become a lengthy process and may need review to find bottlenecks and opportunity for improving efficiency. The Average Invoice Approval Time (IAT) is an operational metric that measures the time it takes from when an invoice is received to when it is fully approved. This metric provides legal departments with valuable insights into the efficiency of their invoice approval processes.
Larger or more complex invoices usually take longer to approve—whether because of detailed reviews or needing multiple signoffs. By monitoring IAT, legal departments can identify where delays happen and look for ways to improve the process. Faster approvals help keep vendor relationships running smoothly while also keeping financial operations on track.
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Business Unit
Practice Area
Time Period
In-House Counsel/Staff
Limitation
While speeding up the process is important, it’s essential not to cut corners. Rushing approvals can lead to missed details, errors, or disputes later on. Also, some invoices simply need more time due to their complexity or regulatory requirements. Understanding these nuances helps make sure the focus is on improving efficiency without compromising accuracy.
Future Target
A big part of improving IAT involves reducing bottlenecks. Streamlining steps, automating repetitive tasks, and making sure everyone involved knows their role can help shorten approval times without sacrificing quality. Regular reviews of the process help ensure that the legal department keeps pace with both internal needs and vendor expectations.
If you’re interested in learning more about this metric, along with other KPIs, check out The Legal Operations KPIs book available on Amazon in English / Spanish. or as an eBook on Google Play in (English / Spanish). It covers essential metrics and KPIs with practical insights to help you get the most out of your legal department.
Visit LegalOpsKPIs.com for more information, exclusive resources such as expert interviews, a chart library, Excel templates, and to connect with a global community of professionals committed to advancing Legal Operations through data-driven insights.
See this article in Linked here: https://www.linkedin.com/pulse/metric-week-10-average-invoice-approval-time-iat-mori-kabiri
InfiniGlobe is a full-service consulting and software company. We have 20+ years of industry experience working with top corporate legal departments and law firms. Contact us at info@infiniglobe.com or at (833) LGL-TECH.