Benefits of Key Performance Indicators

Benefits of KPI and Definitions.

• Helps an operation(s) to measure success within their own organization and to their customer.

• Identifies to an operation(s) where improvements are required to achieve Best Practices within the Industry.

• Management must ensure that accuracy is maintained within ALL the required reports.

• Management must promote honesty in reporting of errors from the ranks to the respective level of management.

• Improves productivity within an operation.

This simple illustration shows what will happen to your business or company without the proper tools and procedures.

Efficient and accurate supply chain metrics empowers logistics organizations to make more informed business solutions. These metrics are directly related to operational performance and include time, cost, and variability data. The Key Performance Indicators (KPIs) typically include the following measurement information: 100% Inventory Accuracy, Order shipping performance (Delivery Lead Time), Order receiving performance, Returns handling, Cycle Count, On time delivery, Freight claims, Freight billing, Volume categorized by the type of orders, Productive miles driven, Counts of shipments, Counts of orders, Cost savings for consolidations, and some other metrics.

KPI Logistic Contents

• Benefits of Key Performance Indicators

SUPPLY CHAIN MANAGEMENT METRICS

• Backorder: Supply Chain Management
• Supply Chain Balanced Scorecard
• Bench Marking – Supply Chain Management
• Cycle Time – Supply Chain Management
• Supply Chain Definition and validation
• Supply Chain Fill Rate
• Supply Chain DPMO
• Supply Chain Management Finance Inventory
• Inventory ABC Classification
• Inventory Accuracy
• Inventory Turns
• Ontime shipping performance
• Perfect Order Measure
• Performance to promise
• Setting Goals for your Supply Chain Metrics
• Tranportation Metrics
• Supply chain Management Acronyms
• The Supply Chain Management

Accounts Receivable KPI

Accounts receivable KPI

1. Total monetary value of overdue invoices.

2. Sum of monetary value of unsettled i.e. unpaid invoices.

3. Average monetary value of unsettled i.e. unpaid invoices.

4. Number of overdue invoices i.e. invoices that have not been paid before their payment date.

5. Number of unsettled i.e. unpaid invoices.

6. Debtor days: Debtor days is a measure of the average time payment takes.

7. Percentage of electronic invoices.

8. Percentage of bad debts against invoiced revenue.

9. Accounts Receivable Collection Period: This reveals how many days it takes to collect all accounts receivable. Fewer days means the company is collecting more quickly on its accounts.

10. Accounts Receivable Turnover: This ratio shows the number of times accounts receivable are paid and reestablished during the accounting period.

11. Costs of processing invoices.

12. Receivables against Product, Region, Sales office: This KPI is to analyse the outstanding receivables, and Overdue receivables and Payables for Product wise, Region wise, Sales Office, Purchase Office.

13. Number of invoices outstanding in measurement period.

14. Average monetary value of invoices outstanding.

15. Total sum of monetary value of outstanding invoices.

16. Average monetary value of overdue invoices.

Accounting KPI Contents

• General Accounting KPI
• Accounts Payable KPI
• Accounts Receivable KPI