Identifying and Monitoring Your Business Drivers + KPIs
Knowing your business drivers and key performance indicators (KPIs) is essential for any entrepreneur or business owner. Business drivers are the factors which determine the success of a company. They can be both internal, such as sales, cash flow, employee retention, and client retention; or external, such as market conditions or customer demand. Key Performance Indicators (KPIs) are actionable metrics that measure progress towards goals related to each driver.
In other words, they show how well your company is doing at achieving its objectives. Having the right KPIs in place allows you to track your performance over time and make adjustments as needed to ensure continued success. Let’s look at some of the ways you can identify and monitor these important business drivers and KPIs.
Internal Benchmarks to Identify Business Drivers
The first step in identifying business drivers is to set internal benchmarks that indicate how well your company is performing in key areas such as sales, cash flow, employee retention, and client retention. For example, if you want to evaluate your sales performance, you can look at quarterly revenue numbers compared to previous quarters. This will help you determine whether or not there has been an increase or decrease in sales over time.
Similarly for cash flow evaluation, look at net income or expenses figures compared to previous quarters in order to see if there have been any changes in cash flow trends for better or worse. To evaluate employee and client retention rates, consider looking at overall turnover rates compared to past periods as well as individual departmental attrition rates compared against industry averages for similar businesses.
Actionable Statistics for Monitoring Drivers: Key Performance Indicators (KPIs)
Once you’ve identified your business drivers through internal benchmarking, it’s important to establish a system of actionable statistics that will help you track their progress over time. This system consists of establishing a “Company Scorecard” which tracks specific metrics that are directly tied to each driver—these are known as Key Performance Indicators (KPIs).
Examples of KPIs include monthly revenue targets versus actual results achieved; tracking customer satisfaction ratings over time; measuring employee engagement levels; monitoring website traffic; tracking average order value; etc. By having these measurable goals in place with defined measurements attached them—you can easily track progress towards each goal on a regular basis and make necessary changes when needed in order to keep on track with achieving them all successfully.
Setting and tracking business drivers is essential for sustainable growth and success in any industry.
To identify what those drivers need to be, accounting professionals are encouraging businesses to benchmark their current and past performance across four main areas: sales, accounting, bookkeeping, cash flow, employee retention or client satisfaction. This can vary from business to business but all intervals of performance should remain a priority for CFO advisory services. When it comes to gauging the effectiveness of these performance markers the goal should always strive toward ‘lean finance’ rather than smaller teams and fewer resources.
Accounting and bookkeeping are essential to running a successful business, but tracking the performance of those tasks can be a challenge. To get a real-time assessment of the data, businesses should rely on Key Performance Indicators (KPIs). With these actionable statistical metrics, accounting teams and CFO advisors alike have an easier time tracking accounting performance and ensuring that their operations remain profitable over time. KPIs unlock valuable insights into your business drivers and provide the clarity you need for informed decision-making.
Conclusion
It’s clear that knowing your business drivers and KPIs is essential for any successful entrepreneur or business owner today! By setting internal benchmarks that indicate how well your company is performing in key areas such as sales, cash flow, employee retention & client retention—and then creating actionable metrics (KPIs) which allow you to track progress towards each goal—you can stay up-to-date on where your organization stands when it comes to overall performance & success! With this information readily available at any given moment—you’ll always be able to make quick & informed decisions about what needs improvement & what areas should remain focused on moving forward into the future!
Keeping track of your KPIs is key to understanding the health of your business.
Establishing a company scorecard will provide insight into important accounting and bookkeeping metrics that can help drive success. Our CFO advisory services offer powerful insights into which metrics you should be tracking and how those measurements help you to reach your objectives. With up-to-date tracking, our experts will provide customized reporting on the trends and changes that are impacting performance over time. Using visuals to keep an eye on relevant KPIs will uncover any issues or opportunities for growth so you can stay agile and proactive in managing the status of your company scorecard.
