Key Performance Indicators for Account Management
KPIs for Account Management: The process of obtaining key performance indicators for an organization can be very challenging. The usual challenge is where to begin. Most companies find the human resource, finance and accounting, and information and technology to be the most difficult to measure performance.
These departments are difficult in capturing their outputs and their work’s impact on the organization. Most companies make the mistake of focusing on what is easy on measuring. The easy functions that most companies focus on include sales, market share, and production output. For any company to be more successful, KPIs must run across all departments.
Common KPIs for Account Management Monitoring
1. Timeliness for account management activities
Timeliness involves the efficiency of putting things in order on time. This includes taking into account the number of days taken to close books of account and sign off the month. Then there is the consideration of the number of days taken to close books of account and sign off the year. The time taken to process invoices and transactions or payments also falls under the timelines category.
The company also has to consider the amount of time spent in correcting documents or input data and payroll processing. Also the percentage of financial reports submissions per given time. Most importantly is the percentage of travel expense accounts processed and accounts receivable in given time.
2. Quality of the accounts produce
There is need for the account management to be timely in every aspect. However it is very important to be very accurate in their chores.
Accuracy will ensure no unnecessary losses and customer complaints. The company must consider percentage accuracy of invoices and that of transactions or payments.
The number of errors and percentage of input errors detected in reports must also be taken into consideration. Also number of errors reported by outside auditors as well as the percentage of implemented audit recommendations. Lastly the percentage of transaction items to be reconciled and rate of collecting outstanding amounts.
3. The effects of generic KPIs
Most companies do not take into consideration the effects of generic KPIs in determining performance of department. Mostly companies will concentrate on what they consider unique to get relevant insights for decision making.
It is important for companies to take into account generic KPIs in decision making. These KPIs include business specific KPI like number of international complaints received in a global operation.
The number of customer satisfaction index can be linked to the accounting work for example and track any issues or best practices backwards. The percentage of processes optimized, tasks finalized as well as the percentage of procedures updated internally.
Another important aspect is the number of accounting employees to Full-time equivalent (FTE) ratio. Lastly the number of engagement index for accounting employees as well as the number of their ideas for improvement.
For larger companies accounting department may consist of different teams for different tasks. For example accounts receivable and accounts payable. In this case a dashboard may be used to monitor all activities. This will be in conjunction with a scoreboard comprising objectives, goals and KPIs. By establishing role of accounting function and clarifying strategy, an organization can easily identify its contribution.