Ten issues of this journal have established Payment Economics as a financial discipline.
Last week's Starter Pack gave you the tools to calculate your own number.
This week builds the measurement system for sustained performance.
The Metrics That Exist
Since 2010, firms like Ardent Partners have benchmarked accounts payable performance. Their work gave the industry a shared language for operational excellence.
Best-in-class AP teams now process invoices in 3.1 days. The average organization takes 17.4. Touchless processing has reached 49.2% among leaders, while most remain closer to 32.6%. Exception rates sit at 9% for best-in-class teams and 22% for average performers.
These gains are real. Organizations that invested in AP automation achieved measurable improvements in speed, cost, and accuracy.
The efficiency stack measures how well you pay. Payment Economics measures what you earn when you pay.
Consider: virtual cards are more efficient than checks. They cost less to process, settle faster, and achieve higher touchless rates. The efficiency metrics capture all of that. A $50,000 payment made with a virtual card also generates $750 to $1,250 in rebate revenue. The check generates nothing. That return sits outside the efficiency framework entirely.
The Core Formula
Payment Yield = Capital Return × Supplier Acceptance
Capital Return is the rebate rate on yield-generating payment methods, typically 1.0–2.5% for virtual cards. This data already exists. Your card issuer reports it. Your dynamic discounting platform tracks it.
Supplier Acceptance is the percentage of addressable spend flowing through yield-generating methods. This is where measurement creates leverage.
A 1.5% rebate rate sounds strong. When only 18% of spend flows through card-accepting suppliers, Payment Yield drops to 0.27%. Organizations with 55% Supplier Acceptance and the same rebate rate achieve 0.83% Payment Yield. On $500 million in addressable spend, that gap equals $2.8 million annually.
The leverage point is Supplier Acceptance. Rates are competitive across providers. Acceptance varies enormously across organizations, and acceptance responds to focused effort.
Most AP teams can report their cost per invoice to two decimal places. Visibility into what percentage of addressable spend flows through yield-generating methods is newer territory. The first metric has been a priority for fifteen years. The second is where the opportunity lives.
Two Pillars, One Opportunity
The Payment Economics Framework organizes metrics across two pillars.
Pillar 2 covers Operational Excellence: cost per invoice, processing time, touchless rate, and exception rate. Best-in-class organizations achieve a cost per invoice of $2.78, compared with $12.88 for average performers. These metrics are necessary and valuable.
Pillar 1 covers Capital Efficiency: Payment Yield, Capital Return, and Supplier Acceptance. These metrics measure economic return.
Most organizations have built strong measurement capability for Pillar 2. Pillar 1 measurement is where new value becomes visible.
A 2025 Mastercard research study found that 42% of suppliers cite manual reconciliation and processing complexity as their primary barriers to card acceptance. When organizations track acceptance rates by supplier, outreach becomes targeted. When they track conversion over time, progress compounds.
What the Measurement Stack Contains
A Payment Economics measurement stack has three layers.
Layer One: Payment Method by Supplier. Which suppliers accept cards. Which accept ACH only. Which still require checks. This information typically lives across vendor master files, payment platform configurations, inboxes, spreadsheets, and institutional knowledge. Consolidating it into a single source of truth is the first requirement.
Layer Two: Return by Method. What rebate rate applies to virtual card spend. How it varies by supplier category, transaction size, or program structure. How much is captured versus contractually available. Most teams receive this data quarterly and in aggregate. Monthly or weekly visibility shifts rebate tracking from retrospective accounting to active management.
Layer Three: Conversion History. When suppliers became eligible. What triggered the conversion. How payment volume shifted after acceptance. This historical layer enables forecasting. Fifteen suppliers converted last quarter and now represent $2.3 million in monthly spend at a 1.5% rebate rate. Future yield becomes predictable. Conversion history turns reporting into planning.
Building the Stack
The work is organizationally complex even when technically straightforward.
Payment method data lives in payment platforms. Invoice data lives in ERPs. Supplier master data lives in procurement systems. Rebate data arrives quarterly from issuers. Aligning payment dates with invoice terms requires coordination across systems built to operate independently.
Gartner reports that 76% of CFOs now own or co-own an enterprise data and analytics strategy. The infrastructure for integrated measurement is already emerging. The strategic choice is whether to apply it to Pillar 2 alone or to both pillars together.
The practical path forward is incremental.
Start with a manual audit of your top fifty suppliers by spend. Identify current payment method, card eligibility status, and, where eligible but unenrolled, the reason.
This exercise alone exposes the yield gap. Thirty suppliers accept cards and only twelve are currently paid that way. The opportunity is clear before building a single integration.
Manual work proves the value. The value justifies investment in infrastructure.
The Payment Efficiency Index
Once you can measure both Payment Yield and operational cost, a more powerful metric becomes possible.
The Payment Efficiency Index (PEI) answers a question that neither pillar answers alone: for every basis point you spend on payment operations, how many basis points of yield do you generate?
PEI = Payment Yield ÷ Payment Cost Ratio
A PEI of 4.0 means every basis point of processing cost generates four basis points of return. This is the target for a well-optimized payment operation.
PEI bridges the pillars. It rewards yield improvement and cost reduction simultaneously. An AP team that reduces processing cost while increasing Supplier Acceptance moves PEI in both directions.
Download the Measurement Matrix
The Payment Economics Measurement Matrix provides templates for tracking all three layers of the measurement stack.
Get the Matrix (Network Members)A Practical Sequence
Week 1: Conduct the data audit. Identify where payment method, rebate, and acceptance data reside. Document gaps.
Month 1: Build a working Payment Yield calculation. Track it alongside efficiency metrics. Identify weak data points.
Quarter 1: Establish a Supplier Acceptance baseline. Segment conversion opportunities by volume and likelihood.
Year 1: Integrate Payment Yield into recurring reviews. Automate what manual work has proven valuable.
This sequence lets infrastructure follow demonstrated need.
The Discipline Requires the Data
Payment Economics is a discipline. Disciplines require measurement. Measurement requires infrastructure.
The measurement stack you build today is the foundation for the advanced metrics that drive tomorrow's decisions.