“Behind every good KPI is a ‘so what’. If you are looking at your KPIs and it does not make you take any action, you do not need to be tracking them,” says Nicole Mackenzie on the Momentum Accounting podcast episode on KPIs with Scotty Scarano.
In an industry like accounting, where it is all about numbers, it is important to have KPIs. It keeps the firm owners and the teams on the right track. As Nicole mentioned in the podcast, it is quite easy to put a finger on what should be your KPI. Every KPI should constitute an actionable item; it should compel the teams to deep dive into what is going on, pivot if needed, and change the strategy to get the results that you are looking for.
No matter what the accounting role is, it is about outcomes, efficiency, compliance, and decision-making. Adding KPIs to the job descriptions when you are setting out to find the right members for your teams. Leaders can use these metrics to craft key financial strategies that can help them achieve organizational or departmental goals. Monitoring KPIs can help businesses assess what works and what still needs a lot of improvement.
What Makes a Good Accounting KPI?
What many firm owners mistake KPI for is just adding random parameters to their team’s to-do’s. The problem with that is it shifts the team’s focus from what is really important. When you set multiple KPIs and they are a mix of not-so-important and key business-driving factors, it can distract them from the true focus area.
Before setting KPIs, focus on incorporating KPIs that go beyond what is generic:
-
Role-Specific
Not every accountant contributes to the business in the same way, so why measure them with the same yardstick? A Junior Accountant responsible for data entry and reconciliations shouldn’t be held to the same KPIs as a Tax Manager dealing with compliance or a Controller driving strategic financial decisions.
Tailoring KPIs uniquely to each role will help ensure relevance, fairness, and effectiveness when the time comes for performance evaluation.
-
Measurable and Objective
In accounting roles, when you add vague metrics like “ensure accuracy”, it does not give the candidate a clear understanding of what they are expected to achieve. Instead, focus on defining what success looks like in a concrete team. You can try using:
- “Maintain a 98% accuracy rate in monthly reconciliations.”
- “Complete all vendor payments within 3 business days of approval.”
-
Aligned with Business Impact
The best KPIs connect daily accounting tasks with the larger business outcomes. Whether it’s cash flow management, compliance, profitability, or audit preparedness, every KPI should help move the business forward.
For example, tracking days to close books every month helps leaders get quick insights to make strategic decisions. After all, you do not want your accountants to just do their jobs. It is also about contributing to the organization’s growth and stability.
-
Balanced: Quantitative + Qualitative
Although it is a number-driven industry, some roles in accounting require qualitative metrics too. For example, in a senior or strategic role, metrics could also include:
- Maintain team engagement score of 80 %+
- Implement two process improvement initiatives each quarter
Deciding upon the KPIs has a lot to do with the kind of role you are hiring for. In fact, at all levels, it is best to strike a balance between quantity and quality to ensure you help your teams grow in a well-rounded manner.
Role-wise KPI that You Can Add in Your Job Descriptions
Like many others, are you struggling to determine which role, or at what seniority level, which KPI fits in just right? We are here to help.
- Accounting Associate/Junior Accountant:
This is a junior-level position, and it is important to treat it that way, especially when setting KPIs. Be careful not to make your associate work like a team leader. This will lead to frustration and eventual burnout. Understand what the role entails better.
Common KPIs could include:
- Number of transactions processed per day/week
- Data entry error rate (in percentage)
- Time taken to reconcile accounts
- Timeliness of bank reconciliations
- SLA adherence for invoice processing
DOWNLOAD THE TEMPLATE PACK NOW
- Senior Accountant:
A Senior Accountant should be responsible for handling more complex tasks than their junior counterparts. Avoid hiring freshers or extreme junior candidates for the position. Understand what the role entails better.
Common KPIs could include:
- Accuracy of month-end close (adjustments or corrections needed – in percentage)
- Days to close monthly financials
- On-time delivery of reports to leadership
- Audit readiness (number of audit queries raised)
- Compliance adherence score (based on internal audits)
DOWNLOAD THE TEMPLATE PACK NOW
- Accounting Manager:
An Accounting Manager is more of a client-driven role. They are the bridge between the accounting firm and the clients. The goal of meeting client satisfaction parameters lies with them. Understand what the role entails better.
Common KPIs could include:
- Team task completion rates (in percentage)
- Reduction in reporting errors across the team
- Financial reporting delivery SLA
- Process improvement initiatives completed
- Cross-functional issue resolution turnaround (in days/hours)
DOWNLOAD THE TEMPLATE PACK NOW
- Tax Accountant:
Taxation is one of the key functions in accounting firms. Laying out what they are expected to do and how they are expected to do it can go a long way in preventing burnout, especially during the season. Understand what the role entails better.
Common KPIs could include:
- On-time filing of all tax returns
- Reduction in tax penalties and notices
- Number of audits without findings
- Tax planning recommendations implemented
- Time spent per client/account (if outsourced)
DOWNLOAD THE TEMPLATE PACK NOW
- Payroll Accountant:
For most of your clients, their payroll is critical. It keeps the business going, ensuring that the teams, vendors, and other partners are paid on time. The KPIs of this role need to be defined, depending on the scope of work you have from the client. Understand what the role entails better.
Common KPIs could include:
- Payroll error rate (% of incorrect payslips)
- Time to resolve payroll discrepancies
- Timeliness of tax withholdings and filings
- Clients’ satisfaction rating for the payroll process
- Compliance audit results
DOWNLOAD THE TEMPLATE PACK NOW
- Director of Accounting/Controller:
This is one of the most important strategic roles in accounting functions. This is a leadership role, and the candidates should be expected to see the success of the entire accounting function. Understand what the role entails better.
Common KPIs could include:
- Reduction in closed cycle duration
- Accuracy of financial forecasts vs. actuals
- Internal audit score improvement
- Team performance metrics and engagement
- Number of automation/process upgrades implemented
DOWNLOAD THE TEMPLATE PACK NOW
To get a head start in finding the right resources for your accounting roles, download our complete JOB DESCRIPTION TEMPLATE PACKAGE.
But the job description is just one part of it. If, like many other accounting firms, you too are struggling to find skilled accounting resources who understand your business and can set you up for success, you might want to consider offshoring.
At Finsmart Accounting, our resources range from junior bookkeepers to reviewers, outsourced CFOs, tax consultants, and so much more. With our team of about 160+ accounting professionals, experienced in US Accounting, with a special focus on the compliance and regulatory requirements, we help make the processes seamless. When you partner with Finsmart, you get access to pre-qualified, pre-vetted accounting talent that helps you scale with ease.
Ready to grow with offshoring?
Book your free consultation call: https://finsmartaccounting.com/usa/free-consultation/
Maanoj is Co-founder & Director of Growth Strategy & Alliance at Finsmart Accounting. He is an Outsourcing Expert, a People Champion, and a Dynamic Leader with strong Business Strategy and Scaling-up experience. He has incubated businesses, sold & exited ventures; helped build strong enterprises in very diversified verticals like Fintech, HR & Consulting spaces in various CXO capacities over the last 20 years.
