CHAPTER NINE
Measurements for the Accounting/Finance Department
THE ACCOUNTING DEPARTMENT SPENDS the bulk of its time processing standard transactions, such as billings, cash receipts, expense reports, and payments to suppliers. Accordingly, many of the measurements in this chapter focus on the efficiency of these types of activities. There are also measurements covering the payroll, general ledger, taxation, collections, and treasury functions.
A key problem with all of the measurements noted in this chapter is that the accounting department is usually responsible for compiling the performance measurements of the entire company—which includes, in this case, itself. If the controller or CFO comes upon a measurement that shows poor accounting performance, there will be a temptation to delay release of the measurement or to alter its calculation to make the result look better. Consequently, the measurements noted here should be assigned to some other department, such as the internal auditing staff, to complete. Alternatively, the measures should be periodically reviewed by someone independent of the accounting department to ensure that they are being properly completed. Measurements to be examined in this chapter include:
| Purchase Discounts Taken to Total Discounts Percentage of Payment Discounts Missed Transactions Processed per Person Transaction Error Rate Average Time to Issue Invoices Average Employee Expense Report Turnaround Time Payroll Transaction Fees per Employee |
