Total cost to perform the process group "manage fixed-asset project accounting" per process group FTE

This measure calculates the total cost per process group full-time equivalent (FTE) employee to perform the process group "manage fixed-asset project accounting," which consists of managing accounts for large funds-invested projects, and managing and accounting for fixed asset projects (capital projects), which require significant capital investments over many years. The total cost is the sum of outsourced, overhead, personnel, system, and other costs. This measure is part of a set of Cost Effectiveness measures that help companies understand all cost expenditures related to the process "manage fixed-asset project accounting."

Benchmark Data

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Measure Category:
Cost Effectiveness
Measure Id:
106269
Total Sample Size:
218 All Companies
Performers:
25th
Median
75th

Compute this Measure

Units for this measure are dollars. Lower values are better.

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Total cost for the process group "manage fixed asset project accounting" / (Number of FTEs who perform the process "perform capital planning and project approval" + Number of FTEs who perform the process "perform capital project accounting")

Key Terms

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Process Cost Components

Total cost for a process, process group, or function consists of the following five components.

Internal/In-house operating cost consists of the first four components (personnel, systems, overhead, and other).

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.

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.

Overhead Costs

For the purpose of this study, provide the total actual overhead costs for the year related to the specified process. These are costs that cannot be identified as a direct cost of providing a product or a service. Include the primary allocated costs such as occupancy, facilities, utilities, maintenance costs, and other major costs allocated to the consuming departments. Exclude systems costs that are allocated, since these will be captured separately as systems cost.

Other Cost

Other costs are costs associated with the specified process, but not specifically covered in personnel cost, systems cost, overhead cost and outsourced cost in this questionnaire. These other costs include costs for supplies and office equipment, travel, training and seminars. Include the cost of telephones, except for that portion captured in systems cost.

External/Outsourced Cost

In determining outsourced cost, include the total cost of outsourcing all aspects of the specified process to a third-party supplier. Exclude one-time charges for any type of restructuring or reorganization. Outsourced costs should also include costs for intracompany outsourcing (i.e., reliance on a shared services center or other business entity).

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

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)

  • 9.4.1 - Perform capital planning and project approval (10751) - Preparing a project finance report to solicit approvals in capital projects. Prepare budgets for projects that require heavy investments. Report on project finances to solicit approvals from management.
    • 9.4.1.1 - Develop capital investment policies and procedures (10844) - Creating procedures and policies to follow for investing in capital projects. Create rules and regulations regarding large investment plans, which require in-depth forecasting for expenditure and revenue.
    • 9.4.1.2 - Develop and approve capital expenditure plans and budgets (10845) - Creating budgets, and soliciting approvals for capital projects. Prepare budgets for projects that require heavy investments. Secure approvals from management.
    • 9.4.1.3 - Review and approve capital projects and fixed-asset acquisitions (10846) - Evaluating and supporting capital investments in projects and fixed assets. Confirm details of capital projects. Secure approvals from managements for large investments.
    • 9.4.1.4 - Conduct financial justification for project approval (10847) - Reviewing all project business cases in order to substantiate projected financial gains. Validate any project's business case. Juxtapose the benefits derived from moving a project forward against the associated costs.
  • 9.4.2 - Perform capital project accounting (10752) - Accounting for large-scale and large-cost investments. Manage and account for ongoing activities related to capital projects, including setting up new projects, recording project transactions, monitoring and tracking spending, closing and capitalizing projects, and measuring the financial returns on completed projects.
    • 9.4.2.1 - Create project account codes (10848) - Giving reference codes for every project.
    • 9.4.2.2 - Record project-related transactions (10849) - Noting every transaction during a project in a common financial database. Document all transactions associated with any project. Maintain a centralized repository of all such financial data.
    • 9.4.2.3 - Monitor and track capital projects and budget spending (10850) - Evaluating project progress and funds invested. Observe and track significant funds invested on any long-term project. Compare to budget.
    • 9.4.2.4 - Close/capitalize projects (10851) - Checking for returns generated from projects for decision making. Evaluate capital projects that require heavy investments. Decide whether to proceed based on the revenues generated.
    • 9.4.2.5 - Measure financial returns on completed capital projects (10852) - Comparing a finished project's profitability with forecasted returns. Scrutinize revenues generated by completed projects that required heavy investments. Determine profitability.