Click on any group within the Finance department to view its KPIs:
Accounts Payable
Aging of accounts payable
The distribution of accounts payable by the length of time they have been outstanding. A lower percentage of aging accounts is generally better, as it indicates that the AP department is effectively managing cash flow and minimizing the risk of default.
Days payable outstanding (DPO)
The average number of days it takes for a company to pay its bills. A higher DPO is generally better, as it indicates that the AP department is effectively managing cash flow by paying bills as late as possible without incurring late fees or damaging relationships with suppliers.
Invoice processing time
The average length of time it takes for the AP department to process an invoice from receipt to payment. A shorter invoice processing time is generally better, as it indicates that the AP department is efficiently managing its workload and minimizing delays in payment.
Number of disputes resolved
The number of billing or payment disputes that are successfully resolved by the AP department. A higher number of disputes resolved is generally better, as it indicates that the AP department is effectively managing and resolving supplier issues.
Number of invoices processed per month
The volume of invoices that the AP department processes on a monthly basis. A higher number of invoices processed is generally better, as it indicates that the AP department is efficiently managing its workload.
Number of overdue accounts
The number of accounts that are overdue on their payments. A lower number of overdue accounts is generally better, as it indicates that the AP department is effectively managing cash flow and minimizing the risk of default.
Payment accuracy
The percentage of payments that are made accurately, without errors or discrepancies. A high level of payment accuracy is generally better, as it minimizes the risk of errors and ensures that suppliers are properly compensated for their goods or services.
Payment timeliness
The percentage of payments that are made on time, without incurring late fees or damaging relationships with suppliers. A high level of payment timeliness is generally better, as it indicates that the AP department is effectively managing cash flow and minimizing the risk of default.
Percentage of electronic payments
The percentage of payments that are made electronically (e.g., via ACH or wire transfer) rather than by check. A higher percentage of electronic payments is generally better, as it indicates that the AP department is efficiently utilizing modern payment methods.
Vendor satisfaction with the billing and payment process
The level of satisfaction that suppliers have with the billing and payment process. A high level of vendor satisfaction is generally better, as it indicates that the AP department is effectively managing the billing and payment process in a way that meets supplier needs.
Accounts Receivable
Aging of accounts receivable
The distribution of accounts receivable by the length of time they have been outstanding. A lower percentage of aging accounts is generally better, as it indicates that the AR department is effectively managing the collection process and minimizing the risk of default.
Cash application accuracy
The accuracy with which the AR department applies payments to customer accounts. A high level of accuracy is generally better, as it minimizes the risk of errors and ensures that customers are properly credited for their payments.
Collection efficiency
The efficiency of the collection process, including the number of collection calls made per hour and the number of payments collected per call. A more efficient collection process is generally better, as it indicates that the AR department is effectively managing the collection process.
Customer satisfaction with the billing and payment process
The level of satisfaction that customers have with the billing and payment process. A high level of customer satisfaction is generally better, as it indicates that the AR department is effectively managing the billing and payment process in a way that meets customer needs.
Days sales outstanding (DSO)
The average number of days it takes for a company to collect payment from its customers. A lower DSO is generally better, as it indicates that the AR department is effectively managing the collection process.
Number of disputes resolved
The number of billing or payment disputes that are successfully resolved by the AR department. A higher number of disputes resolved is generally better, as it indicates that the AR department is effectively managing and resolving customer issues.
Number of overdue accounts
The number of accounts that are overdue on their payments. A lower number of overdue accounts is generally better, as it indicates that the AR department is effectively managing the collection process and minimizing the risk of default.
Payment delinquency rate
The percentage of customers who are overdue on their payments. A lower delinquency rate is generally better, as it indicates that the AR department is effectively managing the collection process and minimizing the risk of default.
Turnaround time for processing customer requests
The average length of time it takes for the AR department to process customer requests (e.g., requests for copies of invoices or credit memos). A shorter turnaround time is generally better, as it indicates that the AR department is efficiently processing customer requests.
Write-off rate
The percentage of accounts that are written off as uncollectible. A lower write-off rate is generally better, as it indicates that the AR department is effectively managing the collection process and minimizing losses.
Credit and Collections
Aging Report
The breakdown of outstanding receivables by age bracket, typically in 30-day increments. It helps identify delinquent accounts that require immediate attention.
Average Days Delinquent (ADD)
The average number of days that an account is delinquent before payment is received. A lower ADD indicates more effective credit and collections management.
Average Payment Days (APD)
The average number of days it takes for customers to pay their invoices. A lower APD indicates better credit and collections management.
Bad Debt Percentage
The percentage of accounts that have become uncollectible and have to be written off as bad debt. A lower percentage indicates better credit risk management.
Collection Effectiveness Index (CEI)
The percentage of outstanding receivables that are collected within a certain time period. It is a good indicator of the efficiency of the credit and collections team.
Credit Limit Compliance
The percentage of orders that are approved within the customers’ credit limits. A higher compliance rate indicates better credit risk management.
Customer Concentration
The percentage of total sales that are generated by the company’s largest customers. A higher concentration increases credit risk exposure.
Days Sales Outstanding (DSO)
The average number of days it takes for the company to collect payment from customers after a sale has been made. A lower DSO indicates better credit and collection management.
Dispute Resolution Time
The average time it takes to resolve customer disputes. A shorter time frame indicates more efficient credit and collections management.
Percent of Total Receivables Over 90 Days
The percentage of outstanding receivables that are more than 90 days past due. A higher percentage could indicate a need for more aggressive collections efforts.
Financial Planning & Analysis
Budget accuracy
The accuracy of the company’s budgeting process, including the extent to which actual results align with budgeted expectations. A higher level of budget accuracy is generally better, as it indicates that the FP&A department is effectively forecasting and planning for the company’s financial future.
Cash flow
The movement of cash into and out of a company. A healthy cash flow is generally better, as it indicates that the FP&A department is effectively managing the company’s financial stability.
Credit rating
The creditworthiness of a company, as assessed by a credit rating agency. A higher credit rating is generally better, as it indicates that the company is viewed as financially stable and may have access to lower interest rates on borrowing.
Debt-to-equity ratio
The balance between a company’s debt and equity financing. A lower debt-to-equity ratio is generally better, as it indicates that the company is using less debt relative to its equity and may be less vulnerable to financial risk.
Interest coverage ratio
A company’s ability to pay its interest expenses on its outstanding debt. A higher interest coverage ratio is generally better, as it indicates that the company is generating sufficient income to meet its debt obligations.
Internal rate of return (IRR)
The rate of return that is expected to be earned on an investment. A higher IRR is generally better, as it indicates that an investment is expected to generate strong returns.
Liquidity
A company’s ability to meet its short-term financial obligations. A higher level of liquidity is generally better, as it indicates that the company has sufficient cash or assets that can be easily converted to cash to meet its short-term needs.
Net present value (NPV)
The present value of a series of future cash flows, taking into account the time value of money. A higher NPV is generally better, as it indicates that an investment is expected to generate positive returns.
Return on investment (ROI)
The profit or loss generated from an investment, expressed as a percentage of the investment made. A higher ROI is generally better, as it indicates that the FP&A department is effectively evaluating and prioritizing investment opportunities.
Variance analysis
The difference between actual results and budgeted or forecasted expectations. A lower variance is generally better, as it indicates that the FP&A department is effectively forecasting and managing the company’s financial performance.
Financial Systems
Availability of Financial Systems
The uptime and accessibility of financial systems to users. It measures the percentage of time that financial systems are available for use by end-users.
Data Accuracy
The accuracy of data within financial systems. It measures the percentage of data that is accurate and error-free.
Data Processing Time
The time it takes to process financial transactions within financial systems. It measures the average time it takes for financial transactions to be processed and recorded.
Financial System Adoption
The adoption rate of financial systems by end-users. It measures the percentage of end-users who are using financial systems compared to the total number of end-users.
Help Desk Resolution Time
The time it takes for help desk tickets related to financial systems to be resolved. It measures the average time it takes for help desk tickets to be resolved from the time they are opened.
Number of System Downtimes
The number of times financial systems experience downtime or become unavailable. It measures the total number of times financial systems become unavailable due to planned or unplanned maintenance.
System Response Time
The time it takes for financial systems to respond to user requests. It measures the average time it takes for financial systems to respond to user requests.
System Security
The effectiveness of financial systems security measures. It measures the percentage of security incidents related to financial systems.
User Satisfaction
User satisfaction with financial systems. It measures the percentage of users who are satisfied with financial systems and the overall user experience.
Workflow Efficiency
The efficiency of financial systems workflows. It measures the percentage of workflows that are completed within the expected time frame.
Internal Audit
Audit Coverage
Tthe percentage of the company’s operations that have been audited within a specified period. It helps ensure that all significant areas of the company are audited on a regular basis.
Audit Impact
The impact of internal audits on the company. It helps ensure that internal audits are adding value to the company and contributing to the achievement of its objectives.
Audit Issue Closure Rate
The rate at which audit findings are closed out. It helps ensure that audit findings are addressed promptly and that remedial action is taken where necessary.
Audit Quality
The quality of audit work performed by the internal audit team. It helps ensure that audit work is of a high standard and that audit findings are reliable and accurate.
Audit Resource Utilization
The utilization of resources within the internal audit team. It helps ensure that resources are used efficiently and effectively.
Audit Team Competency
The competency of the internal audit team. It helps ensure that the team has the necessary skills and knowledge to perform audits effectively.
Audit Timeliness
The average time taken to complete an audit. It helps ensure that audits are completed in a timely manner and that audit findings are acted upon promptly.
Compliance Effectiveness
The effectiveness of the internal audit team’s compliance monitoring activities. It helps ensure that the company is compliant with all relevant laws and regulations.
Risk Assessment Effectiveness
The effectiveness of the internal audit team’s risk assessment process. It helps ensure that audits are focused on the areas of greatest risk to the company.
Stakeholder Satisfaction
The satisfaction of stakeholders with the internal audit function. It helps ensure that the internal audit function is meeting the needs of stakeholders.
Investor Relations
Analyst Coverage
The number of analysts who cover the company and issue reports on its performance. It is an important KPI for the investor relations team, as it helps to attract investor attention and coverage.
Cash Flow
The amount of cash that the company generates from its operations. It is an important KPI for investors who are concerned about the company’s ability to fund future growth.
Debt to Equity Ratio
The amount of debt that the company has relative to its equity. It is an important KPI for investors who are concerned about the company’s financial stability.
Dividend Yield
The percentage return on investment that a company pays out in the form of dividends. It is an important KPI for income-oriented investors.
Earnings per Share (EPS)
The company’s profitability and is a key metric used by investors to evaluate a company’s financial performance.
Investor Perception
The perception of investors and analysts about the company’s financial performance and future prospects. It is an important KPI for the investor relations team, as it helps to identify areas where the company needs to improve its messaging and communication.
Return on Assets (ROA)
How effectively the company is using its assets to generate returns for investors. It is calculated by dividing the company’s net profit by its total assets.
Return on Investment (ROI)
How effectively the company is using its resources to generate returns for investors. It is calculated by dividing the company’s net profit by the total investment.
Revenue Growth
The rate at which the company’s revenue is growing year over year. It helps investors understand the company’s growth potential.
Share Price Performance
The performance of the company’s share price over time. It is an important KPI for investors and helps to evaluate the company’s market value.
Risk Management
Capital Adequacy Ratio (CAR)
The amount of capital a company has relative to its risk-weighted assets. It is an important KPI for risk management, as it helps to ensure that the company has sufficient capital to absorb potential losses.
Credit Risk
The likelihood that a borrower will default on a loan or debt obligation. It is an important KPI for risk management, as it helps to identify potential credit risks in the company’s portfolio.
Liquidity Risk
The risk of not being able to meet short-term cash needs. It is an important KPI for risk management, as it helps to ensure that the company has sufficient liquidity to operate effectively.
Market Risk
The potential losses that may arise from changes in market conditions, such as interest rates or exchange rates. It is an important KPI for risk management, as it helps to identify potential market risks in the company’s portfolio.
Operational Risk
The potential losses that may arise from inadequate or failed internal processes, systems, or people. It is an important KPI for risk management, as it helps to identify potential operational risks in the company’s operations.
Risk-Adjusted Return on Capital (RAROC)
The return that a company generates on its invested capital, adjusted for the level of risk involved. It is an important KPI for risk management, as it helps to ensure that the company is generating sufficient returns relative to the level of risk it is taking.
Stress Testing
Simulating hypothetical scenarios to assess the potential impact of adverse events on the company’s financial performance. It is an important KPI for risk management, as it helps to identify potential vulnerabilities in the company’s operations and prepare for contingencies.
Value at Risk (VaR)
The potential loss in value of the company’s portfolio over a given time period, based on statistical models and assumptions. It is an important KPI for risk management, as it helps to identify potential risks in the company’s portfolio and establish risk limits.
Volatility Risk
The risk of changes in the price or value of a security or portfolio due to volatility in the underlying market. It is an important KPI for risk management, as it helps to identify potential volatility risks in the company’s portfolio.
Weighted Average Cost of Capital (WACC)
The average cost of the company’s capital, taking into account the relative weight of each source of capital. It is an important KPI for risk management, as it helps to ensure that the company is generating sufficient returns relative to its cost of capital.
Tax
Audit Defense Success Rate
The success rate of the company’s defense against tax audits. It helps ensure compliance with tax laws and minimizes the risk of penalties and interest charges.
Effective Tax Rate (ETR)
The company’s total income tax expense as a percentage of its pre-tax income. It provides insight into how well the company is managing its tax obligations.
State and Local Tax (SALT) Compliance
The company’s compliance with state and local tax laws. It helps ensure compliance with tax laws and minimizes the risk of penalties and interest charges.
Tax Compliance Rate
The percentage of tax returns filed on time and accurately. It helps ensure compliance with tax laws and minimizes the risk of penalties and interest charges.
Tax Department Efficiency
The efficiency of the tax department in meeting its objectives. It helps identify opportunities to improve processes and procedures and optimize the use of resources.
Tax Function Employee Engagement
The level of employee engagement within the tax function. It helps ensure that the tax department is staffed with motivated and productive employees.
Tax Planning Savings
The amount of tax savings achieved through tax planning strategies. It helps identify opportunities to reduce the company’s tax liability.
Tax Provision Accuracy
The accuracy of the company’s income tax provision. It helps ensure that the company’s financial statements reflect the correct amount of income tax expense.
Tax Risk Management
The effectiveness of the company’s tax risk management strategies. It helps identify potential tax risks and develop strategies to mitigate them.
Transfer Pricing Compliance
The company’s compliance with transfer pricing rules, which govern the pricing of transactions between related entities. It helps ensure compliance with tax laws and minimizes the risk of penalties and interest charges.
Treasury
Cash balance
The amount of cash that the company has on hand at any given time. A healthy cash balance is generally better, as it indicates that the treasury department is effectively managing the company’s liquidity.
Cash conversion cycle
The length of time it takes for a company to convert its raw materials or inventory into cash. A shorter cash conversion cycle is generally better, as it indicates that the treasury department is effectively managing the company’s working capital.
Cash flow
The movement of cash into and out of a company. A healthy cash flow is generally better, as it indicates that the treasury department is effectively managing the company’s liquidity and financial stability.
Counterparty risk
The risk that a company will be unable to meet its financial obligations to its counterparties (e.g., suppliers, creditors, lenders). A lower level of counterparty risk is generally better, as it indicates that the treasury department is effectively managing the company’s financial relationships and minimizing the risk of default.
Credit rating
The creditworthiness of a company, as assessed by a credit rating agency. A higher credit rating is generally better, as it indicates that the company is viewed as financially stable and may have access to lower interest rates on borrowing.
Debt-to-equity ratio
The balance between a company’s debt and equity financing. A lower debt-to-equity ratio is generally better, as it indicates that the company is using less debt relative to its equity and may be less vulnerable to financial risk.
Foreign exchange risk
The risk that the value of a company’s assets or liabilities will be affected by changes in exchange rates. A lower level of foreign exchange risk is generally better, as it indicates that the treasury department is effectively managing the company’s exposure to currency fluctuations.
Interest coverage ratio
A company’s ability to pay its interest expenses on its outstanding debt. A higher interest coverage ratio is generally better, as it indicates that the company is generating sufficient income to meet its debt obligations.
Return on investment (ROI)
The profit or loss generated from an investment, expressed as a percentage of the investment made. A higher ROI is generally better, as it indicates that the treasury department is effectively managing the company’s investments and maximizing returns.
Treasury management efficiency
The efficiency of the treasury department in managing the company’s financial resources, including the use of cash management tools and technologies. A more efficient treasury management process is generally better, as it indicates that the treasury department is effectively managing the company’s financial resources.
