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

This measure calculates overhead cost to perform the process "process accounts receivable (AR)" as a percentage of total process cost. Overhead cost refers to expenses that an organization cannot identify as direct costs of performing a process. These include occupancy, facilities, utilities, and maintenance, etc. The Process "process accounts receivable (AR)" includes [Processing payments due from customers. This includes all processing of funds received, whether by check or electronically. This does not include the generation of invoices.]. This Supplemental Information measure is intended to help companies evaluate additional variables related to the process "Process accounts receivable (AR)".

Benchmark Data

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Measure Category:
Supplemental Information
Measure Id:
105957
Total Sample Size:
604 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)" / Total cost to perform the process "process accounts receivable (AR)") * 100.0

Key Terms

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Overhead Cost

For the purpose of this study, provide the total actual overhead costs for the year related to the specified process. These are costs that cannot be identified as a direct cost of providing a product or a service. Include the primary allocated costs such as occupancy, facilities, utilities, maintenance costs, and other major costs allocated to the consuming departments. Exclude systems costs that are allocated, since these will be captured separately as 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.