Key Performance Indicators the CRA Uses to Help Charities and Businesses

by Thom Tracy

4 min read

The Canada Revenue Agency, the organization responsible for collecting your tax revenue, has four main goals: providing exceptional service, improving tax compliance, acting with integrity, and leading through change innovation. Each year the CRA measures its performance to these goals using key performance indicators. Performance goals are established and targets are set for each indicator. Tracking the CRA’s KPIs provides insight into what behaviors the CRA is most interested in changing pertaining to charity administrators, nonprofits, and small business owners. It also provides an example of how you can apply KPIs to your own organization.

What Are Key Performance Indicators?

Key performance indicators are used by managers to quantify goal achievement. They are also used to measure performance over time. If you want your business to grow, you should develop KPIs around measures of growth like revenue growth, customer growth, net income growth, and transaction growth. The type of KPI you develop also depends on your industry. Energy companies have different measures of success than software companies. Targets may also vary by industry. Gross margin in the retail industry is generally much lower than it is in the banking industry. In addition to financial KPIs, there are also nonfinancial KPIs. These are important for indirect or support functions. Common nonfinancial KPIs include transactions, turnover, customer satisfaction, and customer complaints. KPIs are a primary tool used by the CRA to achieve its goals.

Charity KPI Examples

The CRA has developed 12 key performance indicators each department uses as a guide in the creation of its own KPIs and targets. One goal is that registered charities and applicants for charitable status receive timely service. The attainment of these targets means the CRA is serving its charitable community faster. A KPI created to measure this performance goal is the percentage of calls related to charities that are responded to within two minutes. The goal is for this KPI to be at or above 80%. Another KPI created around charities is the percentage of charitable registration applications in receipt of a response within the established timeframes. The target for this goal is also 80% or above. In addition to charity service response times, the CRA has KPIs to measure the detection of charity noncompliance, charity phone inquiry response times, and charity written inquiry response times.

Business KPI Examples

In addition to charities, the CRA has KPIs that are specifically aimed at the small- and medium-sized business communities. One of the CRA’s primary KPIs is that 90% of known businesses, especially small businesses, in Canada are registered for GST/HST. The CRA also wants to detect small business noncompliance at least 75% of the time through risk assessment audits. There are KPIs related to making your experience with the CRA a better one, including shorter phone response times. There’s also a KPI target for business tax filers to receive accurate assessment notices 100% of the time.

Create Your Own KPIs

Do you have business goals? If you don’t, it’s a good time to make some. KPIs provide a simple framework. All you need is the desire to make something better in your business. More specifically, you need a goal, a way to measure goal attainment, and a target. These three things can help you create your own KPIs and associated targets.Like the CRA, you can create a few high-level goals, and then use KPIs to measure and track them. Most businesses want to grow sales. Sales are a function of price and transaction volume. Develop a KPI based on price or volume that you can reliably measure and track over time. For instance, percentage increase in average price or percentage increase in average volume are both examples of KPIs that are directly connected to sales.You also want each indicator to contribute to your overall goal of running the business, have a target, and provide an actionable change that you can attach to the attainment of the goal. Assume you own a distribution plant with multiple operating lines. You’ve had high employee turnover the last year and need a way to reduce the rate of errors with new hires. Your KPI is the number of errors in a week or month. A reduction in errors is the goal, and your target is 100% accuracy. One change you can implement is requiring all new hires to write with a red pen. If old employees write with a black pen, all writing in red is highlighted and easier to check. Define your goal, and then use KPIs as a way to set your goal and measure your performance toward that goal.The CRA is using KPIs to help improve services for organizations across Canada. Improvements are aimed at businesses and charities. By using KPIs, the CRA is measuring and tracking goal attainment from a centralized location. Each department at the CRA is responsible for developing specific KPIs that address its specific needs. Following the CRA’s use of KPIs to achieve operational milestones is a way to gain valuable insights about the CRA. It also provides an example framework of how to use KPIs to reach your own goals.

References & Resources

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