KPI (Key Performance Indicator) -measurable values demonstrate how efficient a corporation is at attaining the business’s key objectives. KPIs are used for the evaluation of success in the attainment of targets.
KPI must be:
- Well-defined and measurable
- Well communicated to all departments of an organization
- Vital to achieving goals
- Valid to Line of Business
- Revenue: it is one of the most significant performance indicators to evaluate the success of the organization. Bookkeeping helps you in evaluating revenue.
- Expenditure: calculate cost-effectiveness to find out the best methods for reduction and managing of costs. Expenses are determined from good bookkeeping practices.
- LOB profits vs. objective: It evaluates actual profits and projected profits to identify a department’s performance.
- Expenditure Of supplies Sold: evaluate profit margin by calculating production costs and assessing product markup and actual profit margin.
- Day transaction Outstanding: better the accounts receivable, the better is the efficiency of the organization.
- Sale by area: analysis of sales area-wide helps make better strategies in areas where sales objectives fail.
- LOB operating expense Vs. Budget: comparison of forecasted budget and actual overheads helps in creating an effective budget for the future.
- Client Lifetime Value (CLV): CLV helps determine the value received from a long term client of the organization. This is useful in keeping the best customers.
- Client Acquisition Cost (CAC): it helps in evaluating the cost-effectiveness of a marketing campaign.
- Client Satisfaction & custody: by making customers happy and satisfied, you encourage them to become regular customers.
- Net Promoter Score (NPS): make a survey quarterly and evaluate its growth for long periods.
- The number Of clients: this is a simple and straight forward KPI like Profit—the number of customers gained or lost to determine whether customers’ needs are met or not.
- Client Support Tickets: analysis of CPT helps in creating a successful customer service dept.
- Percentage Of manufactured goods defects: the lesser the number, the better it is performed.
- LOB effectiveness evaluates: Efficiency is measured by the number of products manufactured in specific periods.
- Employee Turnover Rate (ETR): high ETR requires investigation and evaluation of packages and organization culture.
- Percentage of Response to Open Positions: Many applicants depict that the organization is doing well and people want to work with you.
- Employee Satisfaction: the larger the number of happy employees, the healthier the organization.
- Retirement Rate: This is important for developing strategic workforce plans.
- Knowledge Achieved With Training: determines the value of employee training and knowledge enhancement.
- Internal Promotions vs. External Hires: this metric is valuable for determining the succession planning of the organization.
- Salary Competitiveness Ratio (SCR): used to assess the competitiveness of compensation options.
- Customer Churn Rate: determines the percentage of customers who stop purchasing or availing of the service.
- Contact Volume By Channel: determines the number of customer requests and the customer’s communication method, i.e., email, phone, or other.
- Percentage Of Customers Who Are “Very” Or “Extremely” Satisfied: Determines the opportunity to survey customers’ expectations.
- The number Of New Vs. Repeat Site Visits provides differentiation of prospective clients and website traffic.
- Cash Flow from Financing Activities: demonstrates financial strength.
- Average Annual Expenses To Serve One Customer: the average sum required to serve one customer.
- EBITDA (Earnings before Interest, Taxes, Depreciation, & Amortization): Formula: (Revenue) – (Expenses Excluding Interest, Tax, Depreciation & Amortization) = (EBITDA).
- Innovation Spending: the higher the spending figure, the more the value of innovation in an organization.
- (Customer Lifetime Value) / (Customer Acquisition Cost): this value should be greater than one.
Periodic evaluation of KPIs helps make a better strategy for entrepreneurship. It guides in making adjustments necessary for growth and expansion.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-hosted desktop where their entire team and tax accountant may access the QuickBooks™️ file, critical financial documents, and back-office tools in an efficient and secure 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.