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Measurements Formula for the Accounting and Finance Department

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The accounting department spends the bulk of its time processing standard transactions, such as billings, cash receipts, expense report processing, and payments to suppliers. Accordingly, many of the measurements in this post 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 post 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.

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Measurements to be examined in this post 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
Time to Produce Financial Statements
Percentage of Tax Filing Dates Missed
Proportion of Products Costed Prior to Release
Internal Audit Savings to Cost Percentage
Internal Audit Efficiency
Bad Debt Percentage
Percent of Receivables over XX Days Old
Percentage Collected of Dollar
Volume Assigned
Percent of Cash Applied on Day of Receipt
Cost of Credit
Earnings Rate on Invested Funds
Brokerage Fee Percentage
Borrowing Base Usage Percentage

 

Here is the formula list:

Accounting and Finance Dept Measurement-2

Accounting and Finance Dept Measurement Formula-2

Accounting and Finance Dept Measurement Formula-3

More measurement ratio formula you may want to know as well:

Asset Utilization Measurements (Ratios)

Operating Performance Measurements (Ratios)

Cash Flow Measurements (Ratios)

Liquidity Measurements (Ratio)

Capital Structure and Solvency Measurements (Ratios)

Return on Investment Measurements (Ratios)

Market Performance Measurements (Ratios)

Measurements and Ratios For Engineering Department

Measurements and Ratios For Logistics Department

Measurements and Ratios For Production Department

Measurements and Ratios For Sales Departments
 

1 Comment

1 Comment

  1. jusuf christianto

    Dec 2, 2009 at 5:55 pm

    this link is very very helpfull… bravo for Putra… salute and so appriciate… keep up date for us especialy accounting finance and tax

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