Personnel cost to perform the process "process customer credit" per $1,000 revenue

This measure calculates personnel cost per $1,000 revenue to perform the "process customer credit" process which evaluates customers' credit-worthiness, typically in conjunction with generation of a new order or creation of a new customer. 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 customer credit" process.

Benchmark Data

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Measure Category:
Cost Effectiveness
Measure Id:
103010
Total Sample Size:
1,859 All Companies
Performers:
25th
– Median
– 75th
–
Key Performance
Indicator:
No

Compute this Measure

Units for this measure are dollars.

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(Percentage of total cost of the process "process customer credit" allocated to internal costs * Percentage of internal costs of the process "process customer credit" allocated to personnel cost * 0.0001 * Total cost to perform the process "process customer credit") / (Total business entity revenue * 0.001)

Key Terms

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Total Annual Revenue/Net Revenue

Total annual revenue is net proceeds generated from the sale of products or services. This should reflect the selling price less any allowances such as quantity, discounts, rebates and returns. If your business entity is a support unit and therefore does not directly generate revenue, then provide the revenue amount for the units you support. For government/non-profit organizations, please use your non-pass-through budget. For insurance companies the total annual revenue is the total amount of direct written premiums, excluding net investment income. Note: Business entity revenue needs to only include inter-company business segment revenue when the transactions between those business segments are intended to reflect an arm's length transfer price and would therefore meet the regulatory requirements for external revenue 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.

Measure Scope

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Cross Industry (7.3.0)

  • 9.2.1.1 - Establish credit policies (10789) - Creating guidelines for providing advances. Set up credit standards, credit terms, and collection policies.
  • 9.2.1.2 - Analyze/Approve new account applications (10790) - Checking and accepting new requests based on eligibility criteria. Analyze the status of applicants and requirements to be met for a new account.
  • 9.2.1.3 - Analyze credit scoring history (14187) - Reviewing past credit scores to determine the if a line of credit will be extended to potential customers. This could also include extending additional credit to existing accounts.
  • 9.2.1.4 - Forecast credit scoring requirement (14188) - Planning credit score requirements based on established credit policies.
  • 9.2.1.5 - Review existing accounts (10791) - Evaluating existing account holders and their past performance. Regularly review existing accounts to get the required information about the status at present.
  • 9.2.1.6 - Produce credit/collection reports (10792) - Preparing account payable reports about payments to be made according to accounting rules and principles, and providing the reports to management.
  • 9.2.1.7 - Reinstate or suspend accounts based on credit policies (10793) - Closing or restarting accounts according to changes made in credit policies.