Personnel cost to perform the process "process accounts receivable (AR)" per process FTE

This measure calculates personnel cost per process full-time equivalent (FTE) employee to perform the "process accounts receivable (AR)" process, which processes 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 Cost Effectiveness measures that help companies understand all cost expenditures related to the "process accounts receivable (AR)" process.

Benchmark Data


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Measure Category:
Cost Effectiveness
Measure Id:
Total Sample Size:
1,712 All Companies
Key Performance

Compute this Measure

Units for this measure are dollars.

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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 * 0.0001 * Total cost to perform the process "process accounts receivable (AR)") / Number of FTEs who perform the process "process accounts receivable (AR)"

Key Terms

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FTE - (full-time equivalent employee)

To calculate the number of full-time equivalents employed during the year for each respective process or activity, you must prorate the number of employees and the hours spent performing each process/activity. Assume that a full-time worker represents 40 hours per week. Provide the average number of full-time equivalents employed during the year for each respective process. Include full-time employees, part-time employees, and temporary workers hired during peak demand periods. Allocate only the portion of the employee's time that relates to or supports the activities identified for an applicable process. Prorate management and secretarial time by estimating the level of effort in support of each activity, by process.

For example, a part-time secretary in the finance department for XYZ, Inc. charges all of his time to finance department activities. He works 20 hours per week. The secretary splits his time evenly supporting employees working in the general accounting process and the financial reporting process. Thus, his time should be allocated by process. So, if he works throughout the year and supports these two processes, his time would be split evenly as:

20hrs/40hrs = .5FTE * 50% for general accounting = .25FTE for general accounting

20hrs/40hrs = .5FTE * 50% for financial reporting = .25FTE for financial reporting

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.

Cost Effectiveness

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.


The metric value which represents the 50th percentile of a peer group. This could also be communicated as the metric value where half of the peer group sample shows lower performance than the expressed metric value or half of the peer group sample shows higher performance than the expressed metric value.

Measure Scope

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Cross Industry (7.2.1)

  • - 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).
  • - Receive/Deposit customer payments (10800) - Collecting cash from customers. Deposit it into bank account. Make entries into the books of accounts.
  • - Apply cash remittances (10801) - Checking and moving funds between countries for business activities, typically through authorized remittance agents.
  • - Prepare AR reports (10802) - Preparing reports that detail balances due or what to collect from customers at a certain point in time.
  • - 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.