Are you feeling overwhelmed by the thought of tracking your business’s performance? You don’t have to be! While it can be tricky, understanding what Key Performance Indicators (KPIs) to track is essential to get a full picture of how your business is doing.
When it comes down to it, there are three areas that financial KPIs must look at. These are cash flow, profitability, and costs.
Firstly, cash flow shows how money is going in and out of your business. This gives you insight into whether or not you have enough funds available to pay for expenses and investments.
Secondly, profitability tells the story of how efficient your operations are and highlights areas where you may be able to improve efficiency.
Last but not least, cost tracking helps you identify which areas of your business incur the most expenses; this gives you an opportunity to find ways to reduce these costs if necessary.
Conclusion good to know
So, so what are the 10 good KPIs to use in your business. The following ten KPIs to use in your business are covered in the video
- Gross margins
- Break even
- Debtor’s collection period, or receivable collection period
- Stock turnover or inventory term.
- Payables payment period or creditors payment period.
- Working capital cycle
- Customer lifetime value
- Conversion rates
- Throughput
In conclusion, it is essential to know the KPIs to use in your business to accurately gauge their progress and make sure they are heading in the right direction. Keeping an eye on Cash Flow, Gross Margins, Break Even, Debtor’s Collection period, Stock turnover/Inventory Term, Payables Payment Period, Working Capital Cycle, Customer Lifetime Value, Conversion Rates and Throughput will give a clear indication as to how well your business is really performing.
This insight can then be used to make necessary changes that will help your business grow and become more successful. By implementing these 10 great Key Performance Indicators (KPIs) into your business strategy you can ensure that you remain competitive and successful long term. For even more insights into how numbers hold the key to unlocking growth potential from your business why not head over to my I Hate Numbers YouTube Channel and subscribe today!