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Cloud computing services for resource accounting establish, host, and manage services rented out to a remote consumer (individual or business). The scope of services ranges from offering basic computational assets like bandwidth, storage, and computational power to sophisticated enterprise applications such as SaaS.

The commonly used business model to charge for these services is a pay-per-use base, where the consumers use resources according to their needs and are then billed for the used resources at the end of a defined period. Idyllically, the consumers should be offered an explicit resource accounting model that can identify all factors considered for calculating the consumption charges.

Giving the consumer access to their resource usage data can help them in IT budget planning, making them aware of billing applications and automating the assortment of services according to their specific needs. Also, it is to the benefit of the cloud service provider to make this data available for consumers as it would help them develop specifically designed user-centric services. Most of the providers already offer their clients their usage data. However, there are concerns regarding accountability.

Accountability Concerns

An issue that concerns the resource accounting model for such services is the accountability of the resource usage data. The provider, the consumer, or other trusted third party can measure this data. A combination of these players to measure accountability is also an option; however, just like other traditional utility services such as gas and electricity, provider-side accountability is also the norm in the cloud services industry. But unlike the consumer-trusted metering for conventional utilities, there is no such metric for consumers to measure data usage. Therefore, they have no choice but to accept what the provider offers them.

Consumer Side Proposition

Continuing the above discussion, we propose a customer-centric resource accounting model to resolve the concerns of all parties. A customer-centric accounting model will allow the customer to query for calculating billing charges from the service provider programmatically. They will be obliged to respond to the request. Subsequently, a robust customer-centric accounting model will allow the customer or a trusted third party to independently measure the billing charges of cloud services. This will enable consumers to measure their billing charges, which is only fair. It is proposed that the providers should at least adopt the customer-centric models to perform regular checks and raise alarms when there are apparent contradictions in the consumption data.

Inspecting Consumer Centricity of Resource Accounting Model

Many service providers provide or publish details of their billing information. However, it must be examined if the detailed information is based on a customer-centric notion. We will start with a fundamental example and see if there is room for improvement.

S3 Amazon

We use a simple S3 cloud storage service from Amazon to investigate this notion. It is a fundamental pay-per-use base service. It is marketed as a fast, reliable, and low-cost service. However, upon examination, researchers found a few ambiguities in the model, which cannot be programmatically queried from Amazon. This suggests that even the simplest resource accounting models cannot match the standards of a robust consumer-centric model but are loosely coherent with the weak model.

However, specifically for S3, the uncertainties can be easily fixed internally by paying little attention. However, it is recommended that a cloud service provider assemble the third party as a measurement service so that customers can easily access and measure their data usage.

Time Zone

One of the ambiguities was the lack of reference to the time zone upon listing the price concerning geographical location. The start and end days of the billing cycle cannot be determined for sure. However, it can be inferred from the provided Amazon developer’s guide that S3 servers are synchronized to GMT.

Data and Metadata

Another concern of S3 is regarding the measurement of user data. In addition to its data, the S3 resource accounting model has system and user metadata. System metadata is only used by S3, while user metadata is only used by the consumer and has a maximum size of 2KB. However, Amazon fails to clarify the storage space acquired by data and metadata.

Checkpoints

Amazon states that they check the user’s storage space at least twice daily. However, they fail to mention the exact time these checkpoints take place. Upon further investigation, it has been observed that they do not check the cloud storage usage twice daily, and the event randomly takes place anytime in a Zulu time zone.

Therefore, it is concluded that the resource accounting model for the cloud still needs to define specific operation parameters before they become trusted consumer utilities.

About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud platform where their QuickBooks™️ file, critical financial documents, and back-office tools are hosted in an efficient SSO environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.

What You Should Know about Business Tax Audits Conducted by the IRS

1. Most of these audits are conducted in person by the IRS.
2. These audits are comprehensive and cover income tax, employment tax, and payroll tax. Proper preparation is crucial for the audit.
3. The determination of the IRS agent is not final. You have the right to appeal against their determination.

The audit of your business tax return is conducted to verify the authenticity of the information you have filed. Questions such as whether you included all of your income and filed only for deductions permitted by the law are looking into. These audits aren’t conducted at random. Returns are likely to have the IRS select some errors through intricate criteria. The audits begin within a year of filling and are completed mostly within that year.

The Returns of Audits are Conducted in 3 Ways

1. By mail: This type of audit is known as a correspondence audit.
2. At an IRS Office: This type of audit is a desk or office audit.
3. In-person: This audit is conducted at the site of your business or home and is known as a field audit.

As mentioned above, most business audits are conducted in person, i.e., they are mostly field audits. Field auditing is an extensive task and is considered a physical inspection of all aspects regarding owners and their businesses. The IRS looks closely at the accounting system and business records, while physical inspections are carried out to determine the authenticity of those records. A business audit can take up to a year to complete (in most cases). However, the audit time can be reduced if a business properly prepares for the audit with prompt responses to the requests and questions the audit team raises.  

While the audit is being conducted, the IRS requires you to submit all necessary documents (such as bookkeeping records) that are used to determine your financial position. It would help if you were accurate and precise when providing the information the IRS requests. It is recommended to have a licensed tax professional to handle your audit-related tasks. You must provide your tax professional with the facts needed to handle the audit.

Understanding the Scope of an Audit

The scope varies according to the type of audit being conducted. Here’s what you should keep in mind:

• Mail audits are very limited. They include a check on a few items mentioned in the audit letter that the IRS mails you.
• Office audits go into more detail. They are generally less complex than field audits, but in certain situations, they may have a scope similar to that of a field audit.
• Field audits are the most time-consuming. They include questions that probe into the activities of your business and your business’s financial position. It is a wise decision to hire the services of a tax professional to represent your business in front of the IRS.

Preparing Responses to Questions Asked by the IRS

Mail Audit: Preparing for a mail audit is a relatively easy task. You will only have to prepare complete responses to the questions in the audit letter you received via mail.

Field and Office Audits: These can be more complex. In this, you will need to:

1. Prepare for the meeting session you will have with the IRS agent or officer who will be conducting the audit.
2. Prepare and compile the information that the IRS has already requested.
3. Prepare for any sort of questions that the IRS and the IRS agent or officer might ask.

In simpler words, you must be prepared to answer any question related to your financial activity during the year for which you are being audited. You will also need to recreate documentation for anything that isn’t documented (or if relevant documents have been misplaced). Third-party records or other records must be used to reconstruct such documents.

Respond to any request for documents and information promptly and on time.

• The IRS will increase the number of questions if they think you must change your returns. Suppose you get an IDR (Information Document Request) asking for more financial information. In that case, it is important to respond by the deadline to avoid any suspicion on the IRS side.
• The IRS may tell you that income and deductions have been misreported. If you disagree with their conclusion, you must present your interpretation to the IRS.
• Finally, the audit is closed, with the IRS either recommending adjustments to your returns or accepting them as they are. You would, however, be given a 30-day window to appeal their decision.

About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud platform where their QuickBooks™️ file, critical financial documents, and back-office tools are hosted in an efficient SSO environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.

QuickBooks has proven useful in accounting and bookkeeping, especially for incumbents and small businesses. Despite the market being flooded by similar accounting software, such as Xero, Wave, FreshBooks, etc., QuickBooks has taken the lead by transcending the competition. It has been the most favorable among small business owners. Several versions cater to multiple business needs that other competing software currently lacks. Its transcendence in the market for serving small businesses is attributed to the following reasons.

Diversity & Flexibility

QuickBooks is available in different versions, allowing for greater diversity in serving small businesses. Small business owners can choose from various versions depending on their unique business needs and specifications. For instance, QuickBooks offers various versions like QuickBooks Pro, QuickBooks Online Plus, QuickBooks Mac, QuickBooks Hosting, QuickBooks Premier Hosting, and more. Each one comes with unique features to enable businesses to choose the one that fits best with their business needs. The various versions may also be purchased according to one’s budget, allowing for even more flexibility. Hence, QuickBooks leads the competition through flexibility in pricing and features.

User Friendly

Another reason for this market transcendence is the user-friendly interface that it comes with, allowing for easy access and use within the business. Employees working on a legacy system are generally more resistant to change. Traditional bookkeeping has been popularly replaced by accounting software, which may be a source of intimidation for employees at work. However, QuickBooks helps with the initial phase of using the software step-by-step and extends the option to seek professional help.

Compatibility

QuickBooks offers a compatible interface that can be integrated with multiple vertical market applications quickly and easily. This superior compatibility helps align and streamline every single process within the organization and allows for cost, time, and effort savings. Automation sounds like a brilliant idea when it comes to accounting, but automation, to this extent, is no less than a miracle for small businesses.

Customization

In addition to the above reasons, QuickBooks has successfully outperformed the competition due to its ability to customize almost everything related to accounting and bookkeeping. One can customize a chart of accounts to their specific business needs and customize invoices, sale receipts, and estimates. You name it, and QuickBooks has it covered! It sure is a one-stop solution for all your tedious accounting hustles.

Simplification of Tasks

QuickBooks has been an innovation in the market to help serve small business needs related to complicated and enervating accounting procedures and activities. It has provided a complete and sorted package for A to Z accounting and helped simplify complex spreadsheets, returns filling, reconciling, invoicing, and financial reporting tasks throughout organizations, especially for small businesses.

Unlimited Features

QuickBooks has also taken over full responsibility for performing all accounting tasks while providing various features. It manages cash flows, invoicing, billing, receivables and payables, employee performance, bank transactions, check printing, online banking, emails, payroll, and financial reporting. Other features include access to its online version from any internet-enabled device. This is particularly useful for small businesses that are operated remotely.

Business Tracking

Another one of the many reasons why QuickBooks has led the market competition is the streamlining and automation that it has facilitated for small businesses. With its use, business owners have been empowered to track every business transaction and workflow hassle-free and seamlessly. This has enabled a transparent work environment for small business owners.

Conclusion

Therefore, based on the numerous reasons identified above, QuickBooks has remained victorious in establishing a position for itself in the market that transcends any competitor serving small businesses.

About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud platform where their QuickBooks™️ file, critical financial documents, and back-office tools are hosted in an efficient SSO environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.

Undoubtedly, an organization is most interested in how much it can generate gross profits. The profit margin is the total amount a business generates when its revenues generated from the overall sales exceed the total cost. Profit is important for a company for multiple reasons. It is common knowledge that the purpose of every small or big business is to make profits. Without profits, a company does not survive because the employers cannot pay its employees, suppliers, and investors. Even if companies can pay them, they cannot invest in attractive projects because they would not have enough money. Interpreting profit margin is incredibly important for any company because most financial and non-financial decisions depend on its financial prosperity.

Similarly, profit margin measures how successful a firm will profit from each sales dollar.

Understanding Profit Margin Analysis and Bookkeeping in Business

Regardless of their size and operations, most companies rely on sales to track their revenues but knowing the sales revenue alone does not indicate how a company is performing financially. On the other hand, organizations also use bookkeeping to analyze how the company is performing regarding its finances. Generally, companies keep track of their spending and revenue through bookkeeping. The primary benefit of bookkeeping is that it allows you to make a meaningful financial comparison. A well-designed and comprehensive bookkeeping system enables organizations to analyze their overall business spending and revenue. Data can be grouped by years, quarters, months, and weeks for a detailed analysis.

Profit margin is sometimes called “net profit margin,” which displays the big picture of organizational profitability.

The formula to calculate profit margin is dividing the net income by revenues or the net profits by sales. For instance, a company with $400,000 in sales and $10,000 in monthly net income has a net profit margin of 25% = $10,000 / $400,000 = 0.025. This means a company has 25% of net income for every sales dollar. Standalone and comparison analysis are two of the most widely used methods for interpreting profit margins.

Standalone Analysis

Managers and accountants analyze all the profits generated by a single firm, usually their firm, when determining standalone profits. In other words, only those values are generated from organizational operations. The major benefit of analyzing profit margins from the standalone method is that it allows finance managers to evaluate the independent value of the organization. The analysis provides an explicit image of the earning power of a business entity by incorporating its costs and revenues linked with the business. The standalone method of interpreting profit margins enables organizations to observe their complete financial health as if it constitutes a chain of totally independent organizational activities. 

Comparison Analysis

Several companies use percentages more frequently than raw facts and figures when discussing profitability from a broader perspective. In the hyper-competitive business environment, you cannot rely only on a standalone analysis because you must know about the external business environment and its performance. Organizations frequently use percentages to gain a better understanding because it enables you to compare several companies.

While it is beneficial to use profit margins to compare the financial performance of different companies, all the companies being compared must operate in a common industry and incorporate similar business models. The simple reason behind this logic is that organizations operating in diverse industries have implemented different business models with unique revenue streams. Therefore, companies may have considerable differences in profit margins, which will be meaningless.

The analysis will allow you to interpret the business’s current financial health in both cases. When an organization can get an accurate idea of its profitability, it will be able to discover ways to cut back on expenditures and enhance profitability. Additionally, when an organization can improve its profit margin, there will be less pressure and a better environment.

About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud platform where their QuickBooks™️ file, critical financial documents, and back-office tools are hosted in an efficient SSO environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.

Time is money. This fact is simple and very accurate. We have heard that phrase over and over. However, this phrase reaches a much more detailed and specific level for professionals, such as HR executives and business owners. Some companies cater to such needs. They provide software that tracks time and gives more than an auxiliary attendance sheet. An employee’s punctuality is essential. Nonetheless, the organization is a completely integrated system of methods that must be more than a single dimension think-tank. The good news is that software analytics and processes help track time and details differently.

Technology and Time Tracking

There are many ways to track time and all relevant task details for billing purposes. Solutions vary according to needs and markets that are immensely diverse. Due to technological breakthroughs, every solution is customized, and no two may be alike. Starting with paper is a great way to track details for a start. However, there is now software that can speed up the process by using spreadsheets with filters. Usually, trust is not a reliable asset, nor is hope a reliable plan. Using technology to create an accurate environment and enhance the authenticity of data received has vastly increased.

Using timekeeping tools can be instrumental but not always completely reliable. This software tracks time by start and stop points and is almost entirely automated. It records the moment it is embedded into an iOS or Android phone. Every minute on the device can be tracked. But the problem is, it is not accurate enough. Slugging at a task or wasting minutes away cannot be differentiated, as more details are needed. Twitter, for example, can contribute to promoting a blog or post or maybe just wasting time. There is no way to record that with single-standing apps such as Rescue Time or Chromate.

Streamlining Time Tracking for Business Success

For advanced features that project management professionals often require, apps and other essential software can help with seamlessly tracking time on each task, especially client billing. It can be a great way to ascertain precise details of hours spent that are straightforward. If working in a team, many factors of the apps are beneficial as coordination is improved, and there is a more focused and productive use of time. 

One of the main contributors to the expansion and development of any business is the happy and satisfied clientele. Culprits that can hurt the business are overstaffing, rent, ineffective work methods or flows, non-quantification of marketing efforts, and late client payments. Other things may be servicing the business does not need but still has. It is imperative to use smart and goal-oriented methods that do not burden the business to track time.

As it is commonly known, human beings have no receptors for time perception and rely on signs or tools. Tasks and assignments under key tracking systems are much more productive and efficient, leading to a business’s general uprising. The best methods, including timely notification and alerts, prompt staff to execute or expedite orders that help process billing. The business needs to thrive. The biggest failure that weakens a business is the failure to track time and the loss of billing information. With a loyal clientele, your business has a steady stream of success and income. This is the goal! 

Conclusion

You will need to track time for multiple reasons. With the current technology offered to us, we have the resources to stay informed in the areas we need most. With the information given above, you are now ready to begin tracking time.

About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud platform where their QuickBooks™️ file, critical financial documents, and back-office tools are hosted in an efficient SSO environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.

Accounting information is the collected and stored particulars of a business’s financial and accounting data. It is used and processed by the internal users. An accounting system generally uses computer-based data. Accounting data comprises much more than financial statements, balance sheets, and cash flow charts. It contains data on revenue, expenses, bookkeeping, customer information, data related to tax paid and due, and employee information. It also includes sales orders, purchase receipts, requisitions, invoices, ledgers, and financial statements. 

Inventory is up to date in an accounting information system. Check registers previously made on old-fashioned paper registers are now maintained in computerized systems by installing special accounting data using specific software. Using this software makes data interpretation much easier to access and report.

This accounting data is for company use only and consists of customer and employee information and other sensitive data, so they are highly secured. Security checks are maintained in the accounting information system, and hackers and other external sources are prevented from accessing the data.

The accounting information data is very important and must be interpreted correctly. In the case of wrong interpretation, the company can suffer losses. Because of this, entrepreneurs must know the basics of accounting data and its elements. They must fully understand their financial statements. While they can segregate the job to accountants and other personnel, entrepreneurs must still understand the accounting information on their own. They should be able to access, interpret, and account for the information in both internal meetings and with outside sources.

Financial mistakes pose an adverse risk to business growth, and they can damage the reputation of the customers and suppliers.

Common Mistakes Made in Interpretation of Accounting Information and How to Avoid Them 

1. Business owners often mix their finances with business expenses. Keeping these two finances separate is of utmost importance. If these two finances (personal and business) are not segregated, knowing what was intended for business and what was used personally is impossible. The amount of profit generated from invested capital cannot be correctly estimated if the two are intertwined.
2. Entries are not done in time. Getting behind in bookkeeping and submitting entries of expenses or sales will not yield an up-to-date picture of the business and will not allow you to make timely decisions. It can lead to a negative balance if the expenses are entered but the income statement is not updated. Invoices to be paid by the company may go unnoticed and can lead to a bad reputation. It can even end terms with suppliers. Business growth is halted or significantly reduced when you do not enter data in a proper amount of time.
3. Not setting up the proper software the company needs leads to faulty decision-making. Furthermore, installing the wrong software (more complicated than required or lacking crucial functions) can lead to inappropriate data entry. Sound decisions are hard to make when your company lacks the proper accounting software that it needs.
4. Failure to double-check the reports and statements and, instead, just relying on checking the amount of net profit may lead to many errors or malfunctions in business. Accounting information software is just a tool to use. Decisions must be made after completely checking the reports and interpreting the data. Data is interpreted by comparing financial statements with the cash flow statements and the balance sheets.
5. Keeping all receipts until all taxes are paid and an audit is conducted is necessary. Even after that period, receipts are very important for matching data entries in registers or software.
6. After a long day of work, mathematical or data entry mistakes are more likely. Stay focused. One mistake can lead to big errors.
7. Entrepreneurs and business owners must focus on the long-term consequences of their decisions after getting a full picture of their accounting information. Short-term decisions after interpreting account data do not set the business up for long-term benefits. Always focus on the future and the bigger picture.

Conclusion

Correct interpretation of accounting information is the backbone of any business. Specifically, focus on accurate bookkeeping practices and pay attention to every little detail so that you can take that information and make wise decisions for your company.

About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud platform where their QuickBooks™️ file, critical financial documents, and back-office tools are hosted in an efficient SSO environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.

By: Jennifer Brazer

Jennifer is the author of From Cubicle to Cloud and Founder/CEO of Complete Controller, a pioneering financial services firm that helps entrepreneurs break free of traditional constraints and scale their businesses to new heights.

Fact Checked By: Brittany McMillen

Essential Small Business KPIs to Drive Success and Growth

Small business KPIs are measurable indicators that track financial health, customer relationships, and operational efficiency to guide strategic decisions and fuel growth. These metrics transform gut feelings into data-driven insights, helping entrepreneurs identify which activities generate profit and which drain resources. Without proper KPIs, businesses operate blindly—with them, owners gain X-ray vision into their company’s true performance.

I learned this lesson the hard way when my first venture hemorrhaged cash despite “strong” sales. After 20 years leading Complete Controller and partnering with over 500 small businesses, I’ve discovered that companies tracking the right KPIs grow 2.5 times faster than those relying on instinct alone. This guide reveals the exact metrics that separate thriving businesses from struggling ones, plus implementation strategies that take just hours to set up but deliver years of competitive advantage.

What are essential small business KPIs and how do they drive success?

• Small business KPIs are quantifiable metrics measuring financial performance, customer satisfaction, operational efficiency, and employee productivity to inform strategic decisions
• Financial KPIs like cash flow and profit margins reveal sustainability issues 3-6 months before crisis hits
• Customer KPIs including retention rate and lifetime value predict revenue stability better than sales volume
• Operational KPIs such as inventory turnover expose hidden profit drains costing thousands monthly
• Implementation requires selecting 5-7 core metrics aligned with your specific business model and growth stage

Understanding KPIs as Your Business Navigation System

KPIs function like dashboard instruments in your car—each metric provides critical information about your business engine’s performance. Just as you wouldn’t drive cross-country watching only the speedometer, running a business requires monitoring multiple indicators simultaneously.

Since 2012, 65.1% of small businesses have failed by their tenth year according to the U.S. Bureau of Labor Statistics—a rate unchanged from the previous decade. The common thread among survivors? Systematic KPI tracking that catches problems early. Businesses monitoring weekly KPIs spot revenue drops 45 days faster than monthly reviewers, providing crucial runway for course corrections.

Selecting KPIs that match your business DNA

Different business models demand different metrics. A coffee shop tracking software-style monthly recurring revenue wastes precious time, while a SaaS company ignoring churn rate courts disaster. The selection process starts with three questions:

• What drives my revenue? (transaction volume, contract value, repeat purchases)
• Where do I lose money? (returns, waste, inefficiency, bad debt)
• What creates competitive advantage? (speed, quality, innovation, service)

Your answers determine which KPIs deserve dashboard space versus occasional review.

Financial KPIs: Your Business Vital Signs

Cash flow—The oxygen of business

Operating cash flow measures actual money movement, calculated as Net Income + Non-Cash Expenses ± Working Capital Changes. This metric saved Complete Controller three times when profit looked healthy but cash dwindled dangerously low.

According to PYMNTS research, 82% of small business failures stem from cash flow problems, with 45% of owners skipping paychecks to cover expenses. Track this weekly using accounting software that flags when cash reserves drop below 90 days of operating expenses. One bakery client discovered their profitable wholesale division actually drained cash due to 120-day payment terms—switching to net-30 terms restored positive flow within two months.

Net profit margin—True profitability revealed

Calculate net profit margin as (Net Profit ÷ Total Revenue) × 100 to see what percentage of sales becomes actual profit. Industry averages vary wildly—restaurants operate around 3-5% while consulting firms achieve 15-20%—but trending matters more than absolutes.

A landscape company I advised showed 8% margins until we separated residential from commercial work. Residential jobs yielded 18% margins while commercial contracts scraped by at 2%. Dropping low-margin commercial work and doubling residential marketing lifted overall margins to 14% within six months.

Customer acquisition cost (CAC)—Growth economics

CAC equals Total Sales/Marketing Spend ÷ New Customers Acquired. Sustainable businesses maintain CAC below 33% of customer lifetime value. A $5,000 monthly marketing budget generating 25 new customers creates a $200 CAC—profitable only if those customers spend $600+ over their lifetime.

Customer KPIs: Relationship Health Indicators

Customer lifetime value (CLV)—The growth multiplier

CLV = Average Purchase × Purchase Frequency × Customer Lifespan. A fitness studio charging $150 monthly with 18-month average retention has $2,700 CLV. Boosting retention to 24 months adds $900 per customer without acquiring anyone new.

Net promoter score (NPS)—Loyalty quantified

NPS surveys ask one question: “How likely are you to recommend us?” on a 0-10 scale. Subtract detractor percentage (0-6 ratings) from promoter percentage (9-10 ratings) for your score. CustomerGauge research shows each 10-point NPS increase correlates with 3.2% revenue growth.

INAP utilized NPS feedback to reduce customer churn by 50% over two years. They linked survey responses to support tickets, identified common frustrations, and redesigned their onboarding process. The result? Retention improved from 72% to 89%, adding millions in recurring revenue.

Operational KPIs: Efficiency Unleashed

Inventory turnover—Trapped capital finder

Calculate as Cost of Goods Sold ÷ Average Inventory Value. Unleashed Software reports retail businesses average 11.32 turns annually, while manufacturers achieve just 2.67. Low turnover signals overstocking or obsolete inventory, tying up cash.

A boutique clothing store discovered their 3.8 turnover lagged the 5.2 industry standard. Analysis revealed 40% of inventory sat unsold over six months. Implementing smaller, more frequent orders and clearance pricing freed $75,000 in working capital while turnover jumped to 5.5.

Employee productivity rate—Output optimizer

Measure productivity as Revenue per Employee or Units Produced per Hour. Mercer’s research shows tech companies lose 60% of employees annually compared to banking’s 19.8%. High turnover destroys productivity through constant training cycles.

Track productivity by department—sales teams measure revenue per rep, while service businesses monitor the billable hours percentage. One agency improved designer productivity 27% simply by blocking morning meetings, creating uninterrupted creative time.

Implementation Blueprint: From Data to Decisions

Building your KPI dashboard

Start with these five universal small business KPIs:

1. Weekly cash flow (survival)
2. Monthly recurring revenue or sales (growth)
3. Customer acquisition cost (efficiency)
4. Customer retention rate (stability)
5. Gross profit margin (profitability)

Modern tools automate tracking—QuickBooks handles financial KPIs while HubSpot manages customer metrics. Google Data Studio consolidates everything into visual dashboards accessible anywhere. Budget 4-6 hours for initial setup, then 30 minutes weekly for review.

Creating accountability systems

Assign each KPI an owner responsible for monitoring and improvement. The CFO tracks cash flow, sales managers own CAC, and operations leads handle inventory turnover. Public dashboards create positive peer pressure—one client’s sales team increased conversions by 22% simply by displaying real-time leaderboards.

Set review cadences based on metric volatility. Cash flow needs weekly attention, customer satisfaction merits monthly analysis, and strategic KPIs like market share warrant quarterly deep dives. Document insights and actions taken—patterns emerge over time that sporadic checking misses.

Final Thoughts

After two decades helping businesses scale, I’ve learned that KPIs transform overwhelmed owners into confident CEOs. The magic happens when metrics become habits—checking cash flow becomes as routine as checking email, and decision-making shifts from reactive to proactive.

Start with three financial KPIs this week. Add customer metrics next month. By quarter’s end, you’ll wonder how you ever operated without this clarity. For personalized KPI selection and implementation support tailored to your industry, visit Complete Controller where our team helps entrepreneurs build measurement systems that drive sustainable growth.

Frequently Asked Questions About Small Business KPIs

What are the 5 most important KPIs for a small business?

The five essential KPIs are: 1) Operating cash flow (predicts survival), 2) Customer acquisition cost (measures marketing efficiency), 3) Gross profit margin (reveals true profitability), 4) Customer retention rate (indicates satisfaction), and 5) Revenue growth rate (tracks momentum). These metrics provide a comprehensive view of financial health, customer relationships, and business trajectory.

How often should I review my business KPIs?

Review frequency depends on metric volatility and business impact. Check cash flow and daily sales weekly, analyze customer satisfaction and employee productivity monthly, and evaluate strategic metrics like market share quarterly. Financial KPIs facing rapid change need more frequent monitoring than stable operational metrics.

Do KPIs differ by industry?

Yes, industry-specific KPIs reflect unique business models. Restaurants track table turnover and food cost percentage while SaaS companies monitor monthly recurring revenue and churn rate. However, universal metrics like cash flow and customer satisfaction apply across all industries. Choose KPIs matching your revenue model and competitive factors.

What tools can I use to track KPIs effectively?

QuickBooks automates financial KPI tracking, including cash flow, profit margins, and accounts receivable aging. HubSpot manages customer-focused metrics like acquisition cost and lifetime value. Google Data Studio creates unified dashboards pulling data from multiple sources. Industry-specific tools like restaurant POS systems or project management software offer specialized KPI tracking.

Can KPIs really improve my team’s performance?

Absolutely. Publishing transparent KPIs increases accountability and motivation through healthy competition. A logistics company sharing daily shipping accuracy rates improved performance 18% in two months. KPIs also identify training needs—low sales conversion rates might reveal product knowledge gaps rather than effort issues.

Sources

• PYMNTS. (2025, March 18). “Cash Flow Crisis Deepens for SMBs Battling Economic Headwinds.” www.pymnts.com/smbs/2025/study-finds-cash-flow-crisis-deepening-for-small-businesses
• CustomerGauge. (2025). “NPS Impact on Revenue: Correlations & ROI.” customergauge.com/blog/nps-impact-on-revenue
• Unleashed Software. (2024). “19 Inventory Management Statistics & Industry Benchmarks for 2024.” unleashedsoftware.com/blog/inventory-management-statistics
• Mercer. (2024, August). “Results of the 2024 US and Canada Turnover Surveys.” imercer.com/articleinsights/workforce-turnover-trends
• U.S. Bureau of Labor Statistics. (2024). “Business Employment Dynamics.” b2breviews.com/what-percentage-of-small-businesses-fail
• NetSuite. “Small Business KPI Guide.” netsuite.com/portal/resource/articles/business-strategy/small-business-kpis
• Intrafocus. “Top 15 KPIs for Small Business.” intrafocus.com/2024/small-business-kpis
• U.S. Chamber of Commerce. “Essential Business KPIs.” uschamber.com/small-business/performance-metrics
• SimpleKPI. “Financial KPI Dashboard Templates.” simplekpi.com/templates/financial-dashboard
• OptimoRoute. “13 Essential Metrics for Small Business.” optimoroute.com/blog/small-business-metrics
• Khalid Hamada. “10 Essential KPIs for Business Growth.” khalidhamada.com/business-kpis
• altLINE. “Small Business KPI Categories.” altline.com/resources/business-kpis
• Floowi Talent. “Financial and Operational KPIs.” floowi.com/business-metrics
• Investopedia. “Net Profit Margin.” investopedia.com/terms/n/netprofitmargin.asp
• Investopedia. “Customer Acquisition Cost.” investopedia.com/terms/c/customer-acquisition-cost.asp
• U.S. Small Business Administration. “Managing Business Finances.” sba.gov/business-guide/manage-your-business/manage-your-finances

About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud platform where their QuickBooks™️ file, critical financial documents, and back-office tools are hosted in an efficient SSO environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.

For businesses that regularly work in development, contracting, manufacturing, and consultancy, job costing is an essential piece of their bookkeeping capability. It enables them to track and predict costs for distinct jobs, ensuring their profitability and timely delivery. Moreover, it empowers solid project management – from quoting for a new business directly through in-life management to wrapping up the project.

Getting the Job Costing Statement Right

Sales and winning new business are basic goals for every business. As common as the goal is, each company faces problems when pricing its product. Businesses strive to offer their product at a price that customers are willing to pay.

Many companies use a job order cost system. This bookkeeping system helps calculate the materials or components used to develop the final statement. While this sounds generally simple, there are risks involved, and if a project is complex, managing these risks is the ideal approach to guarantee the projected profit margin is achieved with job costing. The ideal approach to this, particularly when the projected profit margins are not huge, is to utilize conduct job costing in the business.

Importance of Job Costing in Business

Controlling business activities without proper bookkeeping is troublesome. It implies that the accounting for every business activity needs more sections, from Work in Progress (WIP) to Cost of Goods Sold statements. It’s not always generally clear when such issues related to costing emerge. Along these lines, there may be the absence of a proper system for cost control, increasing the risk of over-runs and extra costs that jeopardize the possibility of helping the business reach its target margin.

There is a chance to have more than one job ongoing or coexisting at that point; there is a major chance of the wrong assignment of costs and not identifying issues in costing as they occur.

The Benefits of Precise Job Costing

Without a fully detailed cost report, organizations are moving away from accounting programs like QuickBooks for bookkeeping. The setup and execution of a job cost system can appear to be dreary and useless. When done using accounting software, the entire process requires you to do everything correctly for the desired results, or else it will be invaluable to your organization’s financial performance. Job costing is immensely valuable and supportive of an organization in the following territories:

Financial Stability for the Company

Companies must maintain a certain level of credibility regarding financial lenders. When it comes to bonding operators and customers, the organization must have the capacity to oversee and forecast the results of their projects efficiently. Organizations that can’t do this with certainty will find it increasingly hard to accomplish their performance effectively.

Job Management

With information from job costing reports, business administrators and management can better assess the progress and productivity of their business operations. This way, they can better persuade staff to decrease costs and increase returns. 

Support for Claims

Job costing can offer help for legally binding claims. The reports must give points of interest of the genuine cost of recognized varieties, and a foundation for such claims highlights the importance of job costing in business.

Improves Future Work

Cost reports can give important information that helps estimators bid or price out relative work. These reports feature and separate those variable costs that require unique circumspection.

Faster Invoicing

The costs should be accommodated to a specific project and invoicing during or towards the end of a project. At that point, being ready to invoice means a speedier installment if there are differences in the profits.

Better Control Over Business Operations

Companies have exact spending plans against costs when using job costing for effective bookkeeping. This shows inconsistencies rapidly and enables them to be amended. Each project is kept independent from other projects. Job costing maintains all irregularities and helps locate the mistakes corrected on time.

About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud platform where their QuickBooks™️ file, critical financial documents, and back-office tools are hosted in an efficient SSO environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.

Value Your Hard-Earned Money

The biggest misconceptions about household budgeting are spending less, compromising your superfluity lifestyle, and financial restrictions on everything, which means no family hangouts, shopping, or vacations. Budgeting may be associated with a frugal lifestyle, but it doesn’t have to be in reality. Budgeting doesn’t have to make you spend less, but it allows you to spend smartly, preventing you from overspending on less critical items. Staying on top of your hard-earned money is essential for ideal budgeting because, without knowing your monthly expense limit, you cannot expect to have success. Similarly, you cannot expect to make better financial decisions and projections if you do not have a clear picture of your cash flow or finances.

Allocating Your Paycheck(s) Wisely

Although people may have different perspectives about household budgeting, no one can deny that households can save a lot of money for hard times if they properly budget their monthly paycheck(s). Households must set priorities and budget resources effectively to have a financially secure and stable future. Creating a household budget to limit certain extraneous expenses and knowing the actual status of your finances requires a lot of commitment, patience, planning, and wisdom. Your motivation and determination encourage you to save for your family to meet financial uncertainties and emergencies.

Budgeting Helps in Maintaining a Healthy Lifestyle

Cutting monthly expenses is an intimidating task for most households, especially those who have just tied the knot. Ideally, you and your significant other need to make a household budgeting plan right from the beginning to have a financially secure and healthy lifestyle. The need to manage your paycheck(s) has become more intense than before, meaning the ideal management of resources is nearly impossible without a proper budgeting plan.

Household Budgeting Options

Households that cannot correctly budget their paycheck(s) have two options. 

1. Hire a budgeting partner
2. Employ household budgeting software. 

Those who find it challenging and costly to hire a personal budgeting mentor can utilize advanced budgeting software to budget their monthly paycheck(s). All you need to do is search and use the software that can deliver you the best results and budgeting plan according to your needs.

Managing Accounts with Accounting Software

Have you ever wondered why many start-ups fail to manage their internal and external finances? The reason is apparent. They most likely lack the accounting knowledge, skills, and abilities to manage their finances and reduce costs that can be avoided. They also fail to maintain an order in their cash flow (influx or outflow of cash). Sketching a clear picture of your financial standing may be hard but not impossible. Businesses also have two options to know the current financial position of their company. 

1. Hire an accounting professional 
2. Use accounting software.

Accounting Software Or Household Budgeting Software—Is There A Difference?

Yes, accounting and household budgeting software are completely different, but both serve the right needs of their respective domains! Accounting software helps business owners reduce costly errors, minimize tax bills and repayments of debt(s), and, hence, help businesses of every scale know the exact status of their finances for making financial projections. On the other hand, household budgeting software helps families manage their monthly paycheck(s) and allocate their hard-earned income wisely.

Accounting and Budgeting—Done Right!

The best part is that you now have access to the finest accounting and bookkeeping agencies to help you manage your accounts and help you with household budgeting. Some companies also offer a discounted bundle of services or packages that can be cost-effective and reliable.

About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud platform where their QuickBooks™️ file, critical financial documents, and back-office tools are hosted in an efficient SSO environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.

Protecting your financial information is an obligation for every business, big or small. The stakeholders in a company must understand the security procedures necessary for the cause. Events of identity theft and hacking have increased tenfold over the last six to seven years. Hackers have been able to obtain critical information like personal details, email information, and financial information. To make matters worse, people didn’t even know about the theft most of the time.

Therefore, following these tips is essential to protect your crucial information.

Use Strong Passwords and Keep them Private

A weak password offers a hacker a walk in the park. Ensure you use strong passwords that involve numbers, symbols, and other variable patterns to make your accounts impenetrable. Avoid using standard names of things and places. Do not write down your passwords on digital platforms; write them down and store them securely. Alter the passwords regularly if you are keeping critical financial information or something else of importance. And, by no means should you share your passwords with anyone. Please keep them private and secure at all times.

Secure Your Devices

Firewall and security software are necessary if you engage in frequent financial transactions. As a business, installing the latest security features must be your utmost priority because your survival depends on protecting your financial information. Update the software regularly; use the auto-update feature if available. There are many hardware devices that are available on the market for additional security. However, their use is recommended for highly classified information. It is harder to secure a mobile device than a PC. Therefore, avoid using it for financial matters unless there is no way around it.

Establish Two-Factor Authentication

Most cloud storage services ask customers to create a two-factor authentication to access their accounts. This provides an added layer of security to your account. Whenever an unknown device attempts to access your account, you must approve it via another secured access point, which has been determined beforehand. Two-factor authentication is great for protecting your financial information. The efficiency is also excellent, as you will receive an immediate notification on your cell phone or any other registered device. You will be notified immediately of any suspicious activity.

Be Prudent when using Unknown WiFi Connections

Unsecured WiFi connections are highly vulnerable to malicious attacks. Public WiFi is the most susceptible as their security settings are at a minimum level to allow everyone access to the internet. This makes these networks a lucrative target for hackers. At times, while traveling, individuals tend to use airport or hotel WiFi services. They should be careful not to send or receive financial information using the unsecured network. Update your local network security settings for maximum protection of your financial information.

Take the Utmost Care when Downloading

The device assigned to secure the financial information should be used when downloading. Viruses and bugs often come in small patches downloaded along with the requested file without you even noticing. Before clicking any download link, ensure the website runs on a secured (https) platform. Most hacks and data losses take place because people are careless or uninformed when it comes to downloading. It should be company policy that employees should take extreme care when downloading online material to protect their financial information. 

Never Respond to Emails Seeking Personal Information

Emails are another area of vulnerability as they have forged the way for many past scams, frauds, and hacks. Any email that seeks personal information should never be responded to. Call the companies on their authentic numbers given on their website if you receive something of the sort. Don’t even open emails that look suspicious from unknown senders.

Conclusion

Protecting your financial information is a top concern for many organizations in this day and age. With all the uncertainty about data protection and safety because of the incidents involving Facebook and Cambridge Analytica, you must take timely, proactive steps to secure your data and personal information.

About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud platform where their QuickBooks™️ file, critical financial documents, and back-office tools are hosted in an efficient SSO environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.