Accounting KPIs are indicators that show how well your finance processes and reporting activities are performing. By tracking them consistently, finance teams can get a 100% “factual view” of financial stability across the business.
Is your finance team missing its targets? Are there slow month-end closes? Don’t ignore! These are signs your accounting department may be underperforming. And to bring them back on track, you, as a VP or director of a D2C company, must encourage them to measure major accounting KPIs.
These let your staff see patterns that were previously invisible:
- Where profit leaks occur
- Why do processes slow down
- Where manual work creates recurring bottlenecks
- Which suppliers or customers consistently trigger issues
- Where data quality problems originate in your workflows
Read this article to first learn what accounting KPIs are, then see some major KPIs your finance team can track in 2025.
What are Accounting KPIs?
Accounting KPIs (Key Performance Indicators) are metrics that show how well an accounting function, team, process, or system performs against its goals. The primary purpose of such accounting KPIs is:
- Visibility: They reveal the state of books, controls, and cash that raw transactions alone hide.
- Control: They detect process breakdowns, data quality issues, and risk concentration.
- Performance management: They let you measure team productivity, cost of operations, and service levels.
- Decision support: They supply the financial inputs that leaders use for pricing, investment, hiring, and tax planning.
Main Categories of Accounting KPIs
| KPI Category | What It Means | What It Tells You About Your Business | Examples |
| 1. Profitability and Outcome KPIs | These show whether your business is earning or losing money. They measure overall financial health. |
|
|
| 2. Operational KPIs | These measures how fast and smoothly your accounting processes run. |
|
|
| 3. Quality and Control KPIs | These show how accurate and reliable your accounting data is. |
|
|
| 4. Cost KPIs | These show how much money you spend on running your accounting and finance departments. |
|
|
| 5. Risk and Compliance KPIs | These show if your business is following laws, deadlines, and financial rules. |
|
|
| 6. Capacity and Productivity KPIs | These measures how much work your finance team can handle and how much of it is automated. |
|
– Transactions per FTE (staff member)- Automation Rate- Manual Touch Points per Process |
5 Accounting KPIs Every Finance Team Must Track in 2025
Want to get insights that lead to better financial decisions? Encourage your finance/ accounting team to track the five metrics mentioned below, which cover the areas of:
- Finance and accounting
- Profitability
- Cost control
- Process performance
- Compliance
Let’s understand them in detail:
1. Profit and Loss – Shows Your Earning Strength
This metric shows whether your business is profitable or losing money during a specific period. It helps you see which products, services, or costs are pushing profit up or pulling it down. For a growing D2C company earning $5M+ revenue, this is the foundation of financial control because it directly reflects business health.
You can use it to:
- Identify areas where expenses are rising
- Spot revenue drops early
- Understand which parts of your business create the strongest profit
- Evaluate if your pricing covers your costs
By tracking this regularly, you can make better decisions about spending, investments, and business growth.
2. Process Cost – Shows How Much You Spend to Run Finance Tasks
This accounting KPI tells you how much your business spends to handle accounting activities such as:
- Bills
- Payroll
- Bookkeeping
- Financial reporting
Using this number, you can see whether your finance operations consume too much money compared to your total revenue. For a consumer brand, this accounting KPI ensures you do not overspend on tasks that do not directly produce income.
In this metric, your finance team can monitor:
- Cost of software and tools
- Bookkeeping and accounting labour cost
- Time taken to complete routine tasks
- Extra spending caused by errors or rework
Such tracking allows you to control operational spending and decide where automation or outsourcing may reduce costs.
3. On-Time Reconciliations – Shows the Accuracy of Your Daily Money Records
Reconciliation means matching your internal records with bank statements and other financial documents. This accounting KPI measures how often you complete these checks on schedule. For a D2C company, delays in reconciliation can create blind spots that may hide errors, fraud, or missing money.
This KPI helps you understand:
- Whether your accounts are updated in time
- Which tasks or team members cause delays
- If your financial data can be trusted for reports and decisions
- Whether cash flow mismatches are resolved quickly
Keeping reconciliations timely gives you accurate data and lowers the risk of financial surprises.
4. Issue Time to Resolution – Shows How Quickly You Can Resolve Financial Problems
Whenever mistakes appear in your accounts (like incorrect entries, missing invoices, or mismatched amounts), this accounting KPI measures how long your finance team takes to resolve them.
As a VP or director of a D2C company, you should encourage your finance team to track this metric, as unresolved issues usually pile up, create confusion, and cause compliance problems later.
This accounting KPI shows:
- How fast your team detects errors
- How smoothly you correct mistakes
- The complexity of your processes
- Whether your workflows need better structure
The advantage? A shorter issue-resolution time strengthens trust in your numbers and reduces the chance of future penalties or reporting errors.
5. Financial Reporting Timeliness – Shows How Quickly You Close Your Books
This accounting KPI measures how long it takes to finish your monthly or yearly accounts and produce financial statements. For small businesses, slow reporting means you always rely on outdated information. In contrast, timely and accurate reporting supports decisions around cash flow, investments, expenses, and tax planning.
By tracking this KPI, your finance team can know:
- How organized your accounting system is
- Whether manual steps slow down the close
- If they have the right tools and processes
- How dependable your financial data is
The benefits of a faster close? You can get timely information, which strengthens planning and forecasting.
Your Accounting Team Struggling To Perform? Why Not Hire Atidiv as Your Accounting Partner in 2025?
Till now, you must have understood that accounting KPIs are measurable indicators that show how strong, accurate, and reliable your financial operations are. If you want to improve the performance of your finance team, you must encourage them to track these KPIs:
- Profitability and Outcome KPIs: Show if the business is earning money.
- Operational KPIs: Show how smoothly core finance processes run.
- Quality and Control KPIs: Show the accuracy of your financial data.
- Cost KPIs: Show how much your finance function costs to operate.
- Risk and Compliance KPIs: Show whether you meet deadlines and controls.
Is your accounting or finance team struggling in 2025? You can hire an accounting outsourcing company like Atidiv. We are a US accounting firm with 16+ years of experience and 70+ global clients. Our expert team of 390,000+ Chartered Accountants and CPAs recently partnered with a New York–based startup, achieving:
- <10 Days Monthly Closures
- 99%+ Accuracy
- Weekly Cash-Flow Projections
- 80% Time Savings
- 50% Cost Reduction
Want to achieve similar results? Schedule a free call to get started.
Accounting KPIs FAQs
1. How do I set the right accounting KPI targets for my finance team?
Strong KPI targets come from three sources:
- Your past performance
- Industry benchmarks
- Any legal or compliance rules you must follow
Ideally, you may start with your baseline numbers and then set targets that push the team without overwhelming them. Avoid setting goals so high that they create pressure but no real progress.
2. How do I know if my AP (accounts payable) team’s productivity is low?
Track how many invoices each accounting staff member processes monthly. If your number is far below expected ranges (for many companies, 2,000 to 5,000 invoices per FTE), your process is too manual. In such situations, you may prefer automation + use ready-made templates to raise productivity.
3. What should every KPI include so it’s useful and not confusing?
Each KPI must have a clear name, a purpose, and a specific formula (that shows exactly how it is calculated). Additionally, you also need to define:
- Where the data comes from
- How often is it measured
- Who is responsible for it
- What the target is
- What action must you take when the result goes above or below acceptable limits.
Without these elements, an accounting KPI becomes vague and hard to use.
4. Why do many KPI systems fail, and how can I avoid the common mistakes?
Most KPI systems fail because businesses:
- Track too many metrics
- Use poor-quality data
- Include “vanity metrics” that look impressive but don’t drive action
Many KPIs also lack a clear owner or action plan. Okay, so how to avoid failure? Only track important KPIs and fix your data sources. Also, assign an owner to each KPI, and always link every metric to a specific next step if performance falls outside the target range.