Reporting and KPIs

What information do you use to manage your business?

We believe that good financial and management reporting should consist of regularly-produced simple numbers and key performance indicators (KPIs) that you look at daily, weekly and monthly and that that will provide with an early warning system . Remember if you can’t measure it you can’t manage it.

1. Businesses should be monitoring things such as cash flows, which products are making money, break even points, overhead costs, stock turnover, debtor days and debtor collection.

2. You should chose KPIs that are meaningful to you and that reflect the drivers of your profits and your cash.

3. Make sure your information is up to date as there is no point getting reports and accounts when it is too late to take action.

4. Remember that the only reason for any report is to take action of some kind (even doing nothing as a result of a report is OK as long as it is consistent with the findings of the report).

5. Don’t assume that your bookkeeper or accountant (or your full and part time FD) is taking care of numbers and understands them - you need to make sure they do and that you do!