KPIs in Finance: Getting the most out of benchmarks, metrics

While it’s fairly straightforward to establish the right benchmarks and key performance indicators (KPIs) for your Finance team, it might be trickier to put them into practice correctly.

Here’s what the experts suggest to help you and your team boost performance and productivity ASAP.

Make KPIs part of your process

A good starting point is to establish KPIs for Finance based on overall company objectives.

Be sure they help you answer this question: What can Finance do better to help our business achieve its goals? That’ll help you figure out what you should focus on to streamline operations and reduce costs.

Most KPIs that you’ll use in Finance, such as error rates, cost per invoice, time to payment, percent of accounts over 60 days past due and time to payroll, speak for themselves.

But you can’t just set KPIs and forget them. They should be as central to your people’s workflow as regular audits, weekly deadlines and monthly meetings. All your people should be aware of the KPIs you’re measuring and what they can do to reach them.

To accomplish this, you should discuss these KPIs with your team regularly during department meetings and one-on-one check-ins. Review both department KPIs and company goals so everyone can see how their progress is contributing to the bottom line.

Short & sweet

It’s also key not to focus on too many KPIs at once. This can be distracting and overwhelming to staffers. Three to five per team is the sweet spot. Choose metrics that will improve each team’s performance the most. And come up with ways to easily track and measure your people’s progress.

Also, start small and celebrate little wins before expanding your goals. As Finance meets each objective, gradually raise the bar. That’ll keep your people motivated and engaged.

The more successes your people experience, the more buy-in you’ll receive. And that’ll lead to bigger improvements over time.