Building accounting KPIs system plays an important role in evaluating job performance of individual parts, divisions and the company’s objectives and performance management system in general. The development of accounting KPI metrics help to create measurement systems, information systems throughout the organization.
I. Steps to create KPIs of Accounting examples
• Setting up job purpose of Accounting department.
• Setting up key responsibilities/key KRAs of this department.
• Setting up elements that how to measure each KRA.
• Setting up KPI of each KRA.
• Summarize all KPIs of each department.
II. KPI sampls for Accounting field
1. Total Liabilities: Total liabilities represent the sum of all monetary obligations of a business and all claims creditors have on its assets.
2. Cumulative Annual Growth Rate (CAGR):
3. Cash Flow Return on Investments (CFROI): This is similar to ROI, but the only difference is CASH is used inplace of Profit.
4. SG&A expenses: Selling, General, and Administrative Expenses include all salaries, indirect production, marketing, and general corporate expenses.
5. Net profit margin: Net Profit Margin equals the Total Net Income divided by Revenue, expressed as a percentage.
6. Shares Outstanding: Shares Outstanding is the outstanding number of shares of the class of common stock that is most actively traded.
7. Total Equity: Total Equity equals Preferred Stock Equity + Common Stock Equity.
8. Total Current Assets: Total Current Assets equals Cash and Equivalents + Receivables + Inventories + Other Current Assets.
9. Other Current Assets: Other Current Assets includes prepayments, deferred charges, and amounts (other than trade accounts) due from parents and subsidiaries.
10. Inventories: Inventories is merchandise bought for resale or supplies and raw materials purchased for use in revenue producing operations.
11. Net Receivables: Net Receivables are amounts owed to the company, net of any provisions for bad debts.
12. Operating income: Operating Income equals Gross Profit minus SG&A Expenses. It is the income from current operations.
13. Gross profit: Gross Profit equals Revenue minus Cost of Goods Sold. It identifies the amount available to cover other operating expenses.
14. Gross profit margin: Gross Profit Margin equals Gross Profit divided by Revenue, expressed as a percentage.
15. Cost of goods sold (COGS): Cost of Goods Sold includes all expenses directly associated with the production of goods or services the company sells (such as material, labor, overhead, and depreciation). It does not include SG&A.
16. Operating margin: Operating Margin equals Operating Income divided by Revenue, expressed as a percentage.
17. Goodwill: Goodwill is an accounting term used to reflect the portion of the book value of a business entity not directly attributable to its assets and liabilities.
18. Total Assets: Total Assets are everything of value that is owned by a company.
19. Accounts Payable: Money owed (payable) to suppliers for goods or services purchased on credit that must be paid within a year.
20. Long-Term Debt: Long-Term Debt represents the amount of borrowings due more than one year from the date of the balance sheet.
III. KPIs of each position of Accounting field
• Accounting assistant
• Accounting coordinator
• Accounting consultant
• Accounting chairman
• Accounting manager
• Accounting officer
• Accounting producer
• Accounting president
• Accounting recruiter
• Accounting receptionist
• Accounting secretary
• Accounting team leader
• Accounting VP
