Key Performance Indicators (KPIs)
A Key Performance Indictor (KPI) is simply a value that’s used to monitor and measure an area, process or element within a business. Some KPIs are relevant to all businesses, such as Net Profit, but some industries have specific KPIs.
As with so much within our industry, the very use of the initials, or accounting jargon, can be intimidating!
KPIs are linked to the goals of a business. Owners and managers can use them to set targets and regularly monitor the performance of the business towards achieving those goals.
The challenges around KPIs
There are some challenges in deciding which KPIs to look at for any business:
- If you’re not clear on your strategy and objectives, it can be hard to find relevant, non-financial KPIs, and having indicators that cover both areas of the business gives a better indication on progress.
- Different departments in the business will have different opinions as to which measures may be most important.
- Using KPIs that may influence bonus payment and commissions can be difficult for everyone to look at objectively.
- Your internal reporting process may need to be adjusted to allow accurate reporting in an efficient way.
If you’d like to know more about KPIS, do take a look at our Guide, linked below, or get in touch to chat through how they may look for your business. It’s vital to ensure your choice of KPIs is achievable and relevant, and we can help you do that.
The first section below includes links to our ‘Rebound Resources’, designed during Lockdown to help businesses rebound after months of restrictions and, in many cases, prolonged periods of closure. Whilst we hope that there is no return to those dark days, the value in these resources remains. The loss of a key customer or similar challenge can create comparable pressure in a business, and these resources would be just as relevant.
Your new breakeven position
Businesses changed significantly during the pandemic, and those changes will have affected your Breakeven Point. The further we move past Covid, the more likely your Breakeven Point is to have changed again.
Here’s how to work out your current Breakeven Point, with a tool to make monitoring it really easy!
Do you spend enough time on the numbers in your business?
The numbers, or KPIs, around any business can be really powerful in helping you make the right, informed decisions. Do you spend enough time on them? Watch this to find out!
Can you see the gaps?
We’ve been working with some smart cookies recently, but they can’t spot the gaps – can you? Watch this to find out!
Knowing the KPIs in Your Business
See our guide to identifying and tracking the figures within your business, and from there monitoring its performance.
Related News Items
Why not take a look at these sections too, as there is some overlap between our categories and we’d hate you to miss out!
Cash Flow & Forecasts
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Can I just say we are so pleased that we have moved to Baranov Associates. As we discussed when you visited, we had to find a way to take the stress out of all of the financials and you’re doing that for us! We can see how to use Xero more efficiently and so with us being as on top of it as we can be and with you and Liz we feel a lot more confident about our business being in good shape.
Mrs S James, Sandbanks Capital Partners Limited
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