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

This measure calculates the percentage of the total cost to perform the "process accounts receivable (AR)" process that comes from personnel cost. The purpose of this process is to process payments due from customers, including all funds received, whether by check or electronically. Personnel cost refers to employee salaries/wages, bonuses, benefits, etc. 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:
103004
Total Sample Size:
1,670 All Companies
Performers:
25th
Median
75th
Key Performance
Indicator:
No

Compute this Measure

Units for this measure are percent.

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Percentage of internal costs to perform the process "process accounts receivable (AR)" allocated to personnel costs * Percentage of total cost to perform the process "process accounts receivable (AR)" allocated to internal costs * 0.01

Key Terms

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Personnel Cost

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.

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.