Key performance indicators for accounting and finance departments

2. List of KPIs for accounting and finance departments

p>What are some of the key performance indicators and metrics for accountants to track?  Let’s take a look at some examples (the list is not exhaustive):

Overall Accounting and Finance Department KPIs

  • Budget to actual variances (how good are budgeted numbers?)
  • Number of days to close a month (and percent of month closes completed by the established deadline in a 12-month period)
  • Accounting and finance department budget cost as a percent of company sales
  • Accounting and finance employees as compared to company FTEs
  • Number of financial reports prepared and submitted on time
  • Number of days between expense report submission and reimbursements to employees (does the department reimburse its employees timely?)
  • Accounting and finance employee engagement score
  • Internal company satisfaction score with accounting and finance services

Working Capital KPIs

  • Days sales outstanding (how long does it take to collect payments from customers?)
  • Percent of customers with overdue balances (how efficient is the department with collecting customer payments?)
  • Number of days between customer invoices creation and invoice delivery to customers (does the department minimize this time lag?)
  • Number of customer invoice disputes (how many errors do customer invoices contain when they are generated by the department?)
  • Dollar amount of accounts receivable written off (does the company do a good job with vetting customers and does it have a good credit policy?)
  • Days payables outstanding (how long does it take to pay vendors and suppliers?)
  • Percent of suppliers with overdue balances (how optimized payments to vendors in relation to maintaining good supplier relationships, company’s cash flow position and taking advantage of early payment discounts?)
  • Prepaid expenses as a percent of purchases (does the company prepay for services too long in advance thus locking working capital that can be utilized elsewhere in the organization? For example, does the company prepay for insurance for the full year or can it negotiate quarterly payments?)
  • Deferred revenue as a percent of sales (does the company capture opportunities to collect customer payments upfront to maximize cash inflows?)
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