Page 167 - BA2 Integrated Workbook STUDENT 2018

Performance measurement

Non-financial performance measures

Information provided by management accountants needs to be both financial and
non-financial. Financial information is important for management because many
objectives of an organisation are financial in nature, such as making profits. While
profit cannot be ignored as it is the main objective of commercial organisations,
performance measures should not focus on profit alone. Managers also need
information of a non-financial nature.

The large variety in types of businesses means that there are many non-financial
measures which could be used. Each business and business unit will have its own
set of non-financial measures which are relevant to their type of operation.

3.1 Examples of non-financial measures

Non-financial measures are often grouped together into the broad headings of
productivity or quality, for example measurements of resource utilisation or
customer satisfaction.

Examples of non-financial performance measures for different business areas:
Production department Wastage levels

Meeting emissions targets

Sales department Number of new customers
Staff cost per customer

Call centre Number of abandoned calls
Average length of time of calls

Distribution centre Customer complaints
Accuracy of delivery

Illustrations and further practice

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