May 15, 2017
How well is your business doing? What do you measure to determine this? What do you do with the information? Key performance Indicators (KPIs) are the statistics you track to determine how your business is doing.
If you’ve been running your business for a long time, you have developed your own KPIs, even if on an informal basis. Yet, there is merit to formalizing your KPIs and setting up a system to measure and report them on a regular basis.
Determine Your KPIs
You have to start by developing a list of your KPIs. There are KPIs that apply to all businesses and those that vary based on company. As you are coming up with the ones that apply to you, consider the following as ways to measure success:
|Cash||Accounts Receivable||Accounts Payable|
|Start of Day||$10,000||$100,000||$80,000|
|End of the Day||$2,000||$103,000||$71,000|
Use a Flash Report
Your KPIs should be compiled and distributed to everyone on your team. The document is often called a flash report because that data should come out “in a flash.” It’s also referred to by other names like dashboard and scorecard, and it’s simply a way to measure your performance at a glance. Frequency varies, but many companies look at their KPIs on a daily basis.
As you develop your flash report, consider adding the following:
With the use of technology, it’s become commonplace to compile and share this information digitally, often via a webpage like an Intranet. The key is communicating useful information and making it easily accessible to the team members who can influence the results.
Get Help Measuring and Analyzing Your KPIs. You will find that meaningful data is quite useful to the success of your business. We can help you put operational and financial KPIs into place. Contact us to learn how.
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If you’ve been running your business for a long time, you have developed your own KPIs, even if on an informal basis. Yet, there is merit to formalizing your KPIs and...