F&A benchmarking.(EXTRA CREDIT)(finance and accounting)(Reprint)

A PQC research indicates that better performance is correlated with the use of certain business practices. In this article, we explore how accounting practices can be significantly improved in the areas of accounts payable, accounts receivable, general ledger and payroll.

A recent benchmarking research released by APQC, an internationally recognized resource for process and performance improvement, now gives finance and accounting (F&A) executives and managers the ability to evaluate performance and benchmark accounting processes, regardless of industry or geography.

Benchmarking Basics

Benchmarking has become synonymous with continuous improvement for best practice organizations in today's marketplace. How companies rate their business performance has increasingly come to depend on how they compare themselves to the competition. By matching up performance to relevant peer groups and world-class organizations, a company can target both what it does well and where it needs to improve.

Companies are asking key questions such as, "Where are we the most effective? Where are we the least effective? How can we manage cost more effectively?" Today, it's all about the business case, and securing access to comparable data is especially critical in the areas of planning, budgeting and forecasting. The challenge lies in the reality that no two organizations conduct processes the same way. To begin our research effort, we sought to develop a common framework of measures, metrics and definitions that would allow organizations across industries, size and geographies to compare performance (and understand benchmarking) in like terms.

APQC's Open Standards Benchmarking Collaborative[SM] (OSBC) research, has redefined the benchmarking process by creating open, free access to help organizations benchmark performance across functional areas such as F&A.

Using the OSBC database, professionals may compare their business practices with similar organizations and receive a comparative report with quantitative and qualitative information. The report targets key areas for improvement and ways in which the organization can monitor its performance. This real-world view of where an organization stands among its peers provides valuable insights, but the real payoff comes in the ability for an organization to identify individual performance gaps and set forward a course of action to close those gaps.