Total Cost to Perform the Finance Function: Metric of the Month

The beginning of a year is a great time to evaluate the effectiveness of the finance function and the role it plays in helping drive a company’s success. This month’s metric — total cost to perform the finance function as a percentage of revenue — is part of a set of finance process key performan...

By Perry D. Wiggins • Jan. 2, 2020

Metric of the Month: Days to Perform a Site-Level Annual Close

December marks the final month of the fiscal year for many companies. That means that the year-end closing process is here, accompanied by its attendant work spikes and stresses. The annual close comes during one of the heaviest workload periods of the year for accountants, as month-end, quarter-...

By Perry D. Wiggins • Dec. 3, 2019

Metric of the Month: Cycle Time To Perform a Financial Evaluation of New Products

How long does it take your finance team to perform financial evaluations for new products? Have you thought about why it takes as long as it does and what might be causing delays in the process? Have you considered the benefits of this process happening faster? This month’s metric, the cycle time...

By Perry D. Wiggins • Nov. 4, 2019

Metric of the Month: Return on Invested Capital

October falls in the middle of a busy planning season for many organizations, which is the perfect time for this month’s metric on return on invested capital (ROIC). This measure calculates the amount of gain made on invested capital relative to the cost of investment, which gives an organization...

By Perry D. Wiggins • Oct. 1, 2019

Metric of the Month: Days Cash on Hand

This month’s metric, days cash on hand, measures the number of days that an organization can continue paying its operating expenses with the amount of cash currently available. If sales revenue suddenly dried up or an unexpected catastrophe interrupted the business, an organization with substanti...

By Perry D. Wiggins • Sept. 3, 2019

Metric of the Month: How Quickly Businesses Adapt to New Risks

Risks pose a financial and reputational threat to organizations that can be disastrous if left unchecked. The good news is that the warning signs of risks are often hiding in plain sight for those careful enough to look. For example, there were plenty of early warning signs ahead of the Great Rec...

By Perry D. Wiggins • Aug. 6, 2019

Metric of the Month: Total Cost to ‘Manage Taxes’

Taxes are a complicated area of business that often requires carefully designed strategy and planning. In addition to income taxes, an organization has to be mindful of regulations involving property taxes, sales and use taxes, and excise taxes, among others. The situation is even more complicate...

By Perry D. Wiggins • July 9, 2019

Metric of the Month: Total Cost of Budgeting and Forecasting

Plans, budgets, and forecasts can be some of the most valuable contributions that finance makes to the business. Ideally, they help organizations know what’s coming down the road and remain agile enough to respond to uncertainty and to keep the business moving forward. At the same time, planning,...

By Perry D. Wiggins • June 3, 2019

Metric of the Month: Formal Succession Planning Lacking

Succession plans help organizations develop and retain key talent, increase engagement, diversify the pool of potential leaders, and mitigate risk with respect to key positions in leadership and operations. Strong succession planning is critical for any organization because in life there are trul...

By Perry D. Wiggins • May 1, 2019

Metric of the Month: Percentage of Approved Capital Projects Considered Within or On Budget

Capital projects often require significant investments of an organization’s finances, time, human capital, and other resources. These projects are significant undertakings that can cost tens of millions of dollars or even more. When capital projects go off the rails and over budget, the consequen...

By Perry D. Wiggins • April 1, 2019

Metric of the Month: Number of Accounts in the Chart of Accounts

APQC is currently in the middle of transitioning to a new ERP system. In my role as CFO, the most challenging part of this project by far has been cleaning up our chart of accounts as we make the move. With more than 5,000 accounts, our chart of accounts has gotten incredibly bloated over the yea...

By Perry D. Wiggins • March 4, 2019

Metric of the Month: Establishing the Daily Cash Position

The volatility of the stock market over the last few months has many concerned that the longest bull market in American history may be drawing to a close. Uncertain financial times emphasize the need for organizations to take stock of whether they are positioned to withstand whatever might come. ...

By Perry D. Wiggins • Feb. 4, 2019

Metric of the Month: Finance FTEs Per $1B in Revenue

The number of people it takes to keep the finance wheel in continuous motion can vary widely from organization to organization. But when you calculate the ratio of finance team members per $1 billion in revenue, then compare that figure across multiple organizations in multiple industries, the re...

By Perry D. Wiggins • Jan. 8, 2019

Metric of the Month: Business Entity Revenue Per Employee

When organizations make hiring decisions, they’re counting on the people they bring onboard to be well worth the investment. Whether an employee is in a revenue-generating role or serving in an administrative or support capacity, the ratio of revenue generated to each employee can be a key indica...

By Perry D. Wiggins • Dec. 5, 2018

Metric of the Month: Automated Primary Controls

If you’re not already automating your internal controls, you should be. The cost of the technology has come way down, while its capabilities have increased. Advanced controls automation is now accessible even to smaller organizations, and the return on investment is high. Automation not only effe...

By Perry D. Wiggins • Nov. 5, 2018

Metric of the Month: Cycle Time to Prepare the Financial Forecast

Financial forecasting is a high priority for CFOs, and doing it more efficiently and accurately is an admirable goal. Yet so much has been written about forecast accuracy that it is has become one of the myths of modern finance. When managers chase accuracy, the mere act of forecasting often caus...

By Perry D. Wiggins • Oct. 8, 2018

Metric of the Month: Learning Days Per Employee

In the finance world, on-the-job learning never ends. Giving your team hands-on training and stretch assignments are excellent ways to help them grow in their careers, but they don’t take the place of formal learning programs that give them the tools they need to take the finance organization to ...

By Perry D. Wiggins • Sept. 10, 2018

Metric of the Month: Number of Budget Versions

Though summer is still in full swing, CFOs’ thoughts have already turned toward next year. Thus begins the annual budgeting season, with the inevitable multiple versions making their way through endless rounds of approvals. The number of budget versions before final approval reflects the efficien...

By Perry D. Wiggins • Aug. 6, 2018

Metric of the Month: Uncollectible Balances

More than half of organizations consider customers’ adherence to payment terms to be a key indicator of the credit function’s performance. But all too often, organizations take an unrealistically optimistic outlook on past-due receivables — even when deep down, they know that the likelihood of co...

By Perry D. Wiggins • July 5, 2018

The Real Cost of Invoicing: Metric of the Month

For this month’s metric, we focus on the cost to invoice customers, per invoice processed, as reported to APQC’s Customer Credit and Invoicing Open Standards Benchmarking survey by 896 organizations. The process of invoicing a customer, for purposes of this benchmark, includes maintaining custome...

By Perry D. Wiggins • June 6, 2018

Metric of the Month: Days Sales Outstanding Measures Efficiency

Days sales outstanding is a key measure of a finance team’s efficiency and is closely linked to days cash on hand and liquidity. Every organization is happy to have sales, but closing sales isn’t enough to keep a business afloat. Collections are key — and the faster the money comes in, the more b...

By Perry D. Wiggins • May 9, 2018

Metric of the Month: Shared Services

A growing number of organizations are choosing to move common or repetitive finance processes from far-flung corners of their organization to a centralized shared services center, aiming to reduce cost while improving productivity and efficiency. This month’s metric comes from the Financial Share...

By Perry D. Wiggins • April 2, 2018

Metric of the Month: Cycle Time for Monthly Close

When fewer days are devoted to the month-end close, more days can be spent providing finance expertise to organizational initiatives and decisions. By getting a grip on data quality, troubleshooting process glitches, and working ahead, finance teams can save time and put it to good use on higher ...

By Perry D. Wiggins • March 5, 2018

Metric of the Month: Accounts Payable Cost

For some companies, processing accounts payable is a time-consuming, detail-intensive function. For others, it’s a quick and easy task. But before jumping to conclusions about your company’s relative process performance, take the time to view data through multiple lenses: intra-company, intra-ind...

By Perry D. Wiggins • Feb. 5, 2018