KPIs in Accounting: What and How to Measure an Accounting Departments Day to Day.

Are you an accounting leader trying to implement KPIs that are meaningful and measurable? Mainly, we just want to get the books closed and the job done but with most things done in a system or spreadsheet these days, it's hard to keep track of who is making mistakes and how often in a way that we can easily report back to HR management. 

Here are five effective accounting employee KPIs that can help you evaluate the contribution and productivity of your employees:

• Timeliness – This measures how quickly an employee completes their assigned tasks, especially tasks that have a deadline. A good KPI for timeliness is to ensure that all tasks are completed on or before the set deadline. Implement a close checklist with “due dates” for each task (this can even be things like day -1 for tasks to be done before close!).
• Accuracy – This measures how precisely an employee completes a job. It’s an essential KPI for accounting, where accuracy is critical. A good KPI for accuracy is to ensure that all transactions and computations are error-free. Create an error sheet for employees. If you use a system with “audit” reports, you can run a report of the changes made by employee, date, task, etc.
• Productivity – This measures how much work an employee is completing effectively in a given time frame. A good KPI for productivity is to ensure that each employee completes an equal amount of work and has the same level of output. This is the hardest one to measure by far but you can get creative and make an analytic out of the other KPIs, I mention within this article. Think about taking the report with # of errors and adding total number of tasks, hours online, etc.
• Attention to Detail – This measures how well an employee pays attention to details in the accounting process. A good KPI for attention to detail is to ensure that all transactions are reviewed and scrutinized regularly to detect any errors or discrepancies. Similar to the accuracy KPI you can create reports or trackers to identify the frequency of errors or times a transaction was edited, received review comments or was an identified anomaly.
• Customer Satisfaction – This measures how well an employee meets customers’ needs and expectations. While this is an essential KPI for customer-facing roles in accounting firms, in corporate accounting roles, it's hard to understand who the “customer” is when you don’t directly interact with customers. That is the role of support, customer success or other client support title. However, corporate accountants should view their internal business partners as their customers. A good KPI for customer satisfaction is to ensure that customers give positive feedback on the employee’s work quality and responsiveness to their queries. Simple surveys to colleagues employees frequency engage with can measure accounting employee “customer satisfaction”.

Using KPIs is an effective way to measure the productivity and performance of all employees including accounting. While it’s not always straightforward, the use of these creative KPIs can help to improve employee performance, enhance the businesses satisfaction with the accounting department, and increase productivity for the business overall.