Overhead and other costs to perform the process "process accounts receivable (AR)" as a percentage of total process cost

This measure calculates the percentage of the total cost to perform the "process accounts receivable (AR)" process that comes from overhead and other costs. The purpose of this process is to process payments due from customers, including all funds received, whether by check or electronically. Overhead costs refer to those that an organization cannot identify as direct costs of performing a process; these include occupancy, facilities, utilities, and maintenance, etc. Other costs include costs other than personnel, equipment, material, systems, or outsourced costs (e.g., costs for supplies and office equipment, travel, training and seminars). This measure is part of a set of Supplemental Information measures that help companies evaluate additional variables not covered elsewhere for the "process accounts receivable (AR)" process.

Benchmark Data

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Measure Category:
Supplemental Information
Measure Id:
105566
Total Sample Size:
1,062 All Companies
Performers:
25th
Median
75th
Key Performance
Indicator:
No

Compute this Measure

Units for this measure are percent.

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((Overhead cost to perform the process "process accounts receivable (AR)" + Costs other than personnel, systems, overhead, and outsourced to perform the process "process accounts receivable (AR)") / Total cost to perform the process "process accounts receivable (AR)") * 100.0

Key Terms

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Other Cost

Other costs are costs associated with the specified process, but not specifically covered in personnel cost, systems cost, overhead cost and outsourced cost in this questionnaire. These other costs include costs for supplies and office equipment, travel, training and seminars. Include the cost of telephones, except for that portion captured in systems cost.

Supplemental Information

Supplemental information is data that APQC determines is relevant to decision support for a specific process, but does not fit into the other measure categories such as cost effectiveness, cycle time, or staff productivity.

Measure Scope

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Cross Industry (7.2.1)

  • 9.2.3.1 - Establish AR policies (10799) - Creating rules and regulations to be followed in case of credit sales to customers. Create rules and procedures to follow at the time of sale (e.g., the allowable number of installments).
  • 9.2.3.2 - Receive/Deposit customer payments (10800) - Collecting cash from customers. Deposit it into bank account. Make entries into the books of accounts.
  • 9.2.3.3 - Apply cash remittances (10801) - Checking and moving funds between countries for business activities, typically through authorized remittance agents.
  • 9.2.3.4 - Prepare AR reports (10802) - Preparing reports that detail balances due or what to collect from customers at a certain point in time.
  • 9.2.3.5 - Post AR activity to the general ledger (10803) - Preparing the general ledger for account receivables from journals. Place all journal entries related to accounts receivables in the general ledger accounts of a business.