Financial Close KPIs You Should Be Tracking
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There is an old adage “What gets measured gets managed”, however, it is also true that if you are measuring the wrong things you will end up managing the wrong things.
What Do We Mean By KPIs
The biggest problem we often see is that many companies, especially ones with Shared Services Centers, start at the operational level naturally, but never make it to the strategic level to ensure proper alignment across the business.
A few questions to consider here:
- Do your financial operations have a business strategy for the financial close from the CFO?
- Are they tied to your current or future state?
From a business objective perspective, are your metrics or the generation of such metrics aligned to the company plan to deliver on that strategy?
The Sum of the Parts
So, how do you categorize your KPIs so that you are not only focused on operational metrics, but you are also focused on the overall business strategy? It is key to ensure your metrics span across the true measure of the close: time, effort, and quality.
The Top KPIs
Close Time Goal: To ensure an organization has a proper understanding of the time required to perform the standard financial close and that the appropriate amount of resources are available
Close Effort Goal: To ensure an organization has an understanding of the variability in the Close process and the appropriate amount of resources available to perform the financial close process and provide both high job quality and job satisfaction
Close Quality Goal: To ensure an organization has the resources to produce accurate and reliable financial statements for management and regulatory purposes
Underpin With Technology
Once you have decided on the KPIs that matter most to you and your business, you need to ensure that you aren’t just spending all of your time collating and compiling this information. The information needs to be there for all the different sub-processes when and where you need it.
In this eBook, we explore what is meant by KPIs, which KPIs you should be tracking, and how to achieve those with the use of automation. In other words, making sure you are measuring and managing the right information across your business.