This measure calculates personnel cost per $1,000 purchases to perform the "process accounts payable (AP)" process, which consists of processing payments of operating expenses and other supplier charges. Personnel cost refers to employee salaries/wages, bonuses, benefits, etc. This measure is part of a set of Cost Effectiveness measures that help companies understand all cost expenditures related to the "process accounts payable (AP)" process.
Sorry! Not all users have access to all of our resources.
Want to unlock access to all of our resources?Learn about Membership
Personnel cost to perform the process "process accounts payable" / (Value of all materials and services purchased * 0.001)
Personnel cost is the cost associated with personnel compensation and fringe benefits of employees (i.e., those classified as FTEs which includes both full-time and salaried/hourly employees) contributing to each respective process. Personnel cost should include all of the following costs.
Employee Compensation: Includes salaries and wages, bonuses, overtime and benefits.
Fringe: Includes contributions made towards the employees' government retirement fund, workers compensation, insurance plans, savings plans, pension funds/retirement plans, and stock purchase plans. This should also include special allowances, such as relocation expenses and car allowances.
Process Accounts Payable
Processing payments of operating expenses and other supplier charges. This includes the development of policies and procedures around processing of accounts payable and all operations. This process is often supported by key technology enablers.
Cost effectiveness measures are those in which two related variables, one of which is the cost and one of which is the related outcome related to the expenditure are used to determine a particular metric value.