Shared Services Cost Allocation Accuracy
Percentage of internal cost allocations to business units that are correctly calculated and accepted without dispute
What is Shared Services Cost Allocation Accuracy?
Shared services cost allocation accuracy is the percentage of cost allocations issued to business units that they accept without dispute. It shows how well the shared services team's charging is understood and trusted.
Disputed allocations waste time and undermine trust in shared services, so a high rate shows fair and transparent charging.
How this KPI is measured
- Function
- Finance
- Sub-function
- Cost Management
- Industry
- All Industries
- Type
- Lagging
- Impact
- Financial control
- Unit
- %
- Measurement frequency
- Quarterly
- Formula
- (Allocations accepted without dispute / Total allocations issued) × 100
How to calculate it
Divide allocations accepted without dispute by total allocations issued, and multiply by 100.
For example, if 190 of 200 allocations were accepted without dispute, accuracy is 95%.
Record the reasons for disputes, such as unclear drivers or errors, and check that the allocation method is agreed and documented.
Where it is used
Building trust in shared services
Show fair charging.
Reducing disputes
Find causes.
Improving cost transparency
Explain charges.
How to improve it
Tips and common mistakes
- Simple, understandable methods lead to fewer disputes.
- Involve business units in setting drivers.
- Review annually.
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