AccountingWeb

AccountingWEB's guide to key performance indicators (KPIs)

As part of its commitment to helping members manage the profitability and performance of their organisations, AccountingWEB has published a series of articles covering management reporting issues and key performance indicators.

An introduction to KPIs and performance management

KPIs: Get the communication right

Making KPIs work

KPIs and 'MILO BLAIN'

How to devise KPIs that work

How to use KPIs to manage your sales team

Focus on business analysis

Using Excel to report on KPIs - David Carter tutorials

How to report on KPIs #1: Product Mix

How to report on KPIs #2 Product mix and margins

How to report on KPIs #3: Adding data that isn't there

Robin Tidd's KPI Expert Guide series

KPIs: Getting them right

Picking the right KPIs

Getting the information out

Building behaviours

Management reporting tips and techniques

What is the ideal monthly management pack?

The ideal monthly management pack: CIMA's view

Jon Moulton's ideal monthly management pack

Graham Wylie's ideal monthly management pack

Richard Murphy's ideal monthly management pack

PA Consulting: How to reduce management reporting effort

David Carter: Are you a player or a spectator?

Why sales reports have to be produced by an accountant

Getting better reports out of your accounts package

Exchequer: Why management reporting matters for SMEs

AccountingWEB management reporting page

After completing his series on KPIs, contributing editor Richard Murphy concluded that "KPIs are a good thing. They help link goals to targets, and assist reporting against both. If the planning and reporting process is to be integrated with the desire that the business achieves its objectives all this has to be useful."

But what KPIs should be set? That's the hard bit. Below is a collection of KPIs Murphy suggested for a variety of different industries and functions. "Please don't try them all at once, and don't think this list is exhaustive. It isn't. It's just intended as an example of things you might try."

Manufacturing

Meeting sales targets

Achieving target cost prices

Gross margin rates

Waste rates

Achieving budgeted labour rates

Down time

Maintenance budget achieved

On time delivery

Rejection rates

Warranty claims

Rework rates.

Accounting practice (or similar professional organisation)

Delivering on time

Recoverable hours charged

Achieving billing targets

New clients introduced

Value of new work introduced

Added value work sold

Number of tax investigations

Number of complaints

Turn round time on correspondence

Returning phone messages (hard to measure though)

WIP write offs/ons

Low staff turnover

CPD (including spending the budget)

WIP days

Debtor days.

Service organisation (eg web designer)

Sales budget

Obtaining progress payments on time

Delivery dates

Achieving budget

Agreeing payment for contracting variations

Customer satisfaction rates

Down time to repair sites

Complaints

Obtaining follow on support contracts.

Sales team

Absolute sales value

Sales mix (see How to report product mix article)

Total discount from list price.

Finance department

Accounts out on time

Number of credit notes issued to correct errors

Debtor days within target

Accuracy of stock data

Good relationships (ie low contacts) and low error rates with HMRC

Avoiding penalties for tax and accounting

Audit fee budget under control

Timely supply of data requested by other departments

Staying within financing limits

Achieving target for cost savings from creative use of finance, eg saving audit fee, cutting bank charges, using alternative funding, outsourcing where appropriate etc.

Marketing department

Leads generated

Cost per lead

Cost per converted lead

Staying in budget

Column inches of media coverage

Delivery of materials

Website hits

Number of client visits.

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