5 Crucial R2R KPIs

Establishing R2R KPIs is important for identifying potential problems in the process and driving continuous improvement to bring down the cost of the process. Implementing the right measurements is crucial to make sure you are getting the complete picture of what’s happening in the R2R process and can help you improve it sooner rather than later. Here are 5 must-have KPIs to get you started:

1. Time to close. Measuring how long it takes to complete the close process will provide a useful benchmark for improvement (particularly when measured alongside metrics on resources and overall cost). But it’s by breaking the process down and measuring the time taken for each category that you’ll see where you need to make improvements. You might want to measure times taken to:

• Close payroll and record accrued wages

• Send billings to customers

• Complete processing AP

• Value the period-ending inventory

2. Number of entry corrections. Manually adjusting incorrect transactions can seriously slow down the close process. Measuring the corrections made might highlight recurring errors and emerging patterns, helping you pinpoint issues that need to be tackled for a more streamlined process.

3. Volume of transactions per FTE. Measuring this KPI against costs and time to report can illuminate how efficiently you are using resources. This metric could also be used to benchmark against organizations with increased levels of R2R automation to build a business case for such a solution.

4. Growth of chartered accounts. If you’re a multiregional company, or have a growing number of cost centres or general ledger accounts, it can help Procurement and AP if you keep track of this growth. New accounts and cost centres might make it difficult to know where to book and charge invoices correctly, and they can end up in sub-ledgers or in the wrong place. By closing down or disabling inactive accounts you can reduce the instances of retrospectively reclassifying entries to move costs between accounts and cost centres.

5. R2R process cost. Measure how much management of the R2R process costs as a percentage of revenue. Over time, this should help you assess the success of the improvement initiatives you’ve implemented based on the other KPIs.

Tip - best practice for reviewing KPIs. At least quarterly, hold a meeting post-close to review the process, analyzing what needs to be improved and what should’ve been improved following the last meeting.

This is just a selection of some KPIs that help drive improvement. Over on our social network socialspace, R2R professionals and process owners are sharing their own crucial KPIs, best practices and strategies for all things R2R. Share your experience and gain from theirs - join the conversation today.