Key Performance Indicators
So what are Key Performance Indicators (KPI’s) and why do I need them?
Basically, Key Performance Indicators are used to measure the performance of a strategic business goal. It all starts with goals. Where do you want your business to be next year or in 5 years? Do you want to increase your Net Profit Margin or increase Sales? When you track the performance of your Key Performance Indicators, you know in real time if the actions that you are taking are moving toward your goal.
- Do you know what products or services are most profitable and which items need to be reassessed?
- Do you know which Marketing strategy is generating more revenue?
- Do you know where or who your target market is?
So where do I start?
To make good business decisions you need updated and accurate financial data. If you have not kept your financial data up to date and balanced, you cannot get the information that you need to grow your business and get Key Performance Indicators that you need to measure where you are and what you need to do to reach your goal. If you are relying on a “gut feeling” about your business rather than actual financial data then you could be throwing money towards the wrong areas.
“But we can’t afford a Controller, that is for big Companies…”
You still need to fill the needs like a big company. You may be the business owner and do 6 different rolls, but you do not give up on one of those rolls – Just because you do not have a Bookkeeper does not mean that you do not pay your bills. You can’t afford to hire a full time Controller, but you can still find someone for a reasonable price to fill this roll.
5 Reasons Why This is a Good Idea:
- You will know where you are and how far you are from reaching your goals, and adjust your goals along the way if needed.
- Pinpoint and manage key underlying issues. By tracking the numbers you know what to fix.
- Discover problems BEFORE it’s too late and then make adjustments to correct the issue.
- Quantify success and failure. By understanding the numbers, you understand if you are succeeding or not.
- Offer employees more constructive feedback. Tracking tells employees what is important, how they are being judged, and what needs to be improved.
If you need help gaining this valuable insight into your business and tracking your Key Performance Indicators, Dailey Bookkeeping Services would love to help you. The owner, Jacqueline Dailey is a Certified Public Bookkeeper, a Certified QuickBooks and QuickBooks Online ProAdvisor and a Xero Certified Advisor. We work remotely so we can work with any company located in the U.S. If we can help you with this process or provide you with custom reporting, please give us a call. If we cannot help you, we will refer you to someone who can!