Every business has numbers.
But not every number deserves your attention.
A Key Performance Indicator — usually called a KPI — is simply a measure that helps you understand whether an important part of your business is performing well.
For one business that might be sales.
For another it could be gross profit margin, labour cost, customer collections, average job value or cash available.
Why Are KPIs Useful?
Imagine your total sales are increasing.
That sounds positive.
But if your profit margin is falling at the same time, the business may actually be working harder without making enough additional profit.
Looking at the right KPIs can bring that problem to your attention earlier.
Examples of KPIs
Depending on the business, useful KPIs may include:
monthly sales
gross profit margin
net profit
labour costs
average customer value
debtor days
cash available
budget versus actual results
job profitability
other industry-specific measures.
You don't need dozens of KPIs.
Usually, a small number of meaningful measures is much more useful than a complicated dashboard full of information.
How SKC Accounting Can Help
We can help you:
identify the KPIs that matter to your business
establish practical reporting
monitor trends
compare results over time
explain what movements may mean
identify areas that may require attention.
Common Questions
Can't find your question? Email us.
How many KPIs should I track?
There is no magic number. The important thing is to track measures that genuinely help you run the business.
Are KPIs only financial?
No. Some operational measures can also be useful, depending on the business and the information available.
Do all businesses need KPI reporting?
Not necessarily. For a very small business, a few basic measures may be enough. KPI reporting becomes increasingly useful as the business grows or becomes more complex.
Continue Learning
What KPIs Should I Be Watching in My Business?
What Should I Review Every Month in My Business Accounts?
What Is a Healthy Profit Margin for My Business?
Service Delivery Disclosure
SKC Accounting Financial & Advisory Services Pty Ltd trading as SKC Accounting is a licensee of Platinum Accounting Australia Pty Ltd (Platinum). Platinum is a Registered Tax Agent (Tax Agent No. 24683431). Tax agent services, including the preparation, review and lodgement of tax returns, and BAS/GST services requiring registered-agent authority, are provided through Platinum under the applicable engagement arrangements. For more information, please visit Platinum Accounting Australia.
Let’s Talk About Your Business
A useful first conversation starts with what your business does, what is creating pressure and what you would like to improve. Book a Complimentary Initial Consultation to discuss the support that may suit your circumstances.