Systems cost to perform the process "process accounts payable (AP)" per $100,000 revenue

This measure calculates systems cost per $100,000 revenue to perform the "process accounts payable (AP)" process, which consists of processing payments of operating expenses and other supplier charges. Systems costs include a variety of specific costs related to computer hardware/software, network maintenance, data storage, etc., and all fees paid to full-time, part-time, or temporary employees or independent contractors hired to perform these services. 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.

Benchmark Data

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Measure Category:
Cost Effectiveness
Measure Id:
103338
Total Sample Size:
1,943 All Companies
Performers:
25th
Median
75th
Key Performance
Indicator:
No

Compute this Measure

Units for this measure are dollars.

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Systems cost to perform the process "process accounts payable" / (Total business entity revenue * 0.00001)

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.

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.

Systems Cost

Systems costs include all expenses, paid or incurred, in conjunction with:

Computer hardware or computer software acquired by the organization or provided to the organization through service contracts.

Any related costs to process, service and maintain computer hardware or computer software. The costs of providing and maintaining services for each applicable process (e.g., computer system(s) processing (CPU) time, network/system communication charges, maintenance costs for applications and data storage). This includes the costs related to LANs, WANs, etc. This does not include one-time costs for major new systems developments/replacements. Consultant fees should not be included in depreciation of new system implementations. Include only those costs that occur more than six (6) months after implementation, as normal system maintenance costs. Any systems cost (e.g., maintenance) which is outsourced to a third party supplier should be captured in the separate cost category labeled outsourced cost.

Systems cost should include all salaries, overtime, employee benefits, bonuses or fees paid to full-time, part-time or temporary employees or independent contractors who perform services relating to computer hardware, computer software, processing or systems support.

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 (7.2.1)

  • 9.6.1.1 - Verify AP pay file with purchase order vendor master file (10869) - Matching records of bills to be paid with accounts. Check accounts payable entries with vendor's account for every payment made.
  • 9.6.1.2 - Maintain/Manage electronic commerce (10870) - Tracking all online transactions.
  • 9.6.1.3 - Audit invoices and key data in AP system (10871) - Monitoring and evaluating bills registered in accounts books. Check all invoices. Maintain records.
  • 9.6.1.4 - Approve payments (10872) - Processing payments for products/services.
  • 9.6.1.5 - Process financial accruals and reversals (10873) - Handling transactions for accruals and reversals. Record transactions in the books of accounts on an accrual basis (irrespective of the actual cash flow) and reversals basis (cancel out the adjusting entries) for balancing accounts.
  • 9.6.1.6 - Process payables taxes (10874) - Filing the amount of taxes that a company owes as of the balance sheet date. Prepare tax returns, including the income tax filing for an individual or business entity from earnings.
  • 9.6.1.7 - Research/Resolve payable exceptions (10875) - Resolving any atypical or inconsistent situation concerning payments to be made by the organization. Address any exceptional case of accounts payable on an ad hoc basis, by seeking counsel or carrying out any necessary research.
  • 9.6.1.8 - Process payments (10876) - Making payments for products/services on due dates (payment cycle) decided by parties involved.
  • 9.6.1.9 - Respond to AP inquiries (10877) - Clarifying or address queries relating to the particulars of AP such as date, discounts, amount, and installments. Coordinate with concerned parties about the fulfillment of bills payable.
  • 9.6.1.10 - Retain records (10878) - Keeping bills of every transaction for future reference.
  • 9.6.1.11 - Adjust accounting records (10879) - Rectifying for alterations occurred in accounts while recording.