Key Performance Indicators That Need Attention

Key Performance Indicators - Complete Controller

KPIs, also known as Key Performance Indicators, are essential metrics that allow you to monitor and track your business performance. These metrics help you navigate your way to success and growth, which is crucial when exploiting new opportunities and tapping into new markets. Unfortunately, most companies get their key performance indicators completely wrong by copying others’ metrics which may be ideal for them but not you. This often results in a business losing its competitive advantage or a significant market share, ultimately removing the business from the competitive race. ADP. Payroll – HR – Benefits

Follow Your Own KPIs

Although your inclinations matter and often yield prominent results, this is an outdated strategy that does not accurately define your company’s success. Running a business is no easy feat as it requires a thorough analysis of financial results. Business owners who are adept at examining and evaluating their finances tend to succeed and survive in the market for long durations. According to a study, “Business metrics or KPIs display a measurable value that shows the progress of a company’s goals.” To evaluate the health of your business, specific KPIs suitable to your industry provides an ideal snapshot of where your firm is going— and whether it is going in the right direction. Essentially, every business is unique to some degree, and companies cannot simply copy similar metrics used by others in your industry. Cubicle to Cloud virtual business

Measure Success

Profit is not the only measure of success for your business. Although it can define your company’s financial health, it is not the only thing that contributes to a company’s success. Companies have short and long-term goals, and KPIs can help you make more confident decisions regarding your company’s growth and development. Profit, along with KPIs, plays an integral role in defining your company’s success as a whole. Since every business is unique and has a different business model, companies need to customize the KPIs that best fit their needs and purposes.

Well-Known KPIs

There are various KPIs you can follow to track and monitor the performance of your company, but core KPIs can provide you with the insight you are seeking.

  1. To measure and understand your customers, you need to know KPIs such as customer retention rate, conversion rate, relative market share, customer profitability score, net promoter score, etc.
  2. To measure and understand your financial performance, you need to know KPIs such as net profit, revenue growth rate, net profit margin, gross profit margin, operating profit margin, return on investment (ROI), cash conversion cycle, etc.
  3. To measure and understand your internal process, KPIs that can be used are order fulfillment cycle, project schedule variance, project cost variance, capacity utilization ratio, bookkeeping accuracy level, quality index, and process downtime level.
  4. KPIs such as staff advocacy score, employee engagement, absenteeism level, human capital value, and 36-degree feedback score can be used to measure and understand your employees. Exit Advisor

Basic Level KPIs

Small businesses usually have human resources, capital, and finances to evaluate their performance against all the aforementioned KPIs. Therefore, they usually go with the basic, yet most effective, KPIs, which include the following:

  1. Revenue: Whether small or large, businesses track their revenue to ensure that their income maintains a steady pace. When the revenue trend shows a downward sloping, this indicates that the business needs a new marketing strategy to boost their revenue. Similarly, when revenue shows an upward trend, it means that the business’s revenue is increasing, which is when businesses need to maintain the trend.
  2. Expenses: When businesses evaluate expenses in terms of a KPI, they consider spending trends. Reducing expenses is healthy for a business because fewer expenses mean a stronger income statement.

Gross Profit Margin: Gross profit margin is the percentage of each dollar you earn after subtracting direct expenses. It reveals how well you are doing to balance your income and expenses.

CorpNet. Start A New Business Now 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. Complete Controller. America’s Bookkeeping Experts