Personnel cost to perform the process group "process accounts payable and expense reimbursements" per process group FTE

This measure calculates personnel cost per process group full-time equivalent (FTE) employee to perform the "process accounts payable and expense reimbursements" process group, which consists of processing payments of operating expenses and other supplier charges and processing of advancements and reimbursements for employee expenses on the organization's behalf. 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 and expense reimbursements" process.

Benchmark Data

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Measure Category:
Cost Effectiveness
Measure ID:
104829
Total Sample Size:
1,443 All Companies
Performers:
25th Median 75th
- - -
Key Performance Indicator:
Yes

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Compute this Measure

Units for this measure are dollars.

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(Personnel cost to perform the process "process accounts payable (AP)" + Personnel cost to perform the process "process expense reimbursements") / (Number of FTEs who perform the process "process accounts payable (AP)" + Number of FTEs who perform the process "process expense reimbursements")

Key Terms

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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 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 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 (7.3.1)

  • 9.6.1 - Process accounts payable (AP) (10756)
    • 9.6.1.1 - Verify AP pay file with purchase order vendor master file (10869)
    • 9.6.1.2 - Maintain/Manage electronic commerce (10870)
    • 9.6.1.3 - Audit invoices and key data in AP system (10871)
    • 9.6.1.4 - Approve payments (10872)
    • 9.6.1.5 - Process financial accruals and reversals (10873)
    • 9.6.1.6 - Process payables taxes (10874)
    • 9.6.1.7 - Research/Resolve payable exceptions (10875)
    • 9.6.1.8 - Process payments (10876)
    • 9.6.1.9 - Respond to AP inquiries (10877)
    • 9.6.1.10 - Retain records (10878)
    • 9.6.1.11 - Adjust accounting records (10879)
  • 9.6.2 - Process expense reimbursements (10757)
    • 9.6.2.1 - Establish and communicate expense reimbursement policies and approval limits (10880)
    • 9.6.2.2 - Capture and report relevant tax data (10881)
    • 9.6.2.3 - Approve reimbursements and advances (10882)
    • 9.6.2.4 - Process reimbursements and advances (10883)
    • 9.6.2.5 - Manage personnel accounts (10884)
  • 9.6.3 - Manage corporate credit cards (20929)
    • 9.6.3.1 - Establish corporate credit card policies and approval limits (20930)
    • 9.6.3.2 - Process corporate credit card requests (20931)
    • 9.6.3.3 - Order corporate credit cards (20932)
    • 9.6.3.4 - Manage corporate credit card accounts (20933)
    • 9.6.3.5 - Approve/Change credit limits (20934)
    • 9.6.3.6 - Cancel/Deactivate credit card (20935)