Know your company’s KPI

What are your company's Key Performance Indicators? Why is it important for you to know what these are and to monitor them on a regular basis?

Many business owners avoid focusing on their financial reports because it is not their area of expertise . Well here's the good news. You don't need to be an accountant to read and understand a well-designed KPI dashboard.

Key Performance Indicators

Key Performance Indicators or KPI's are a critical touch point for monitoring and managing the performance of your business. With the right tools in place you should be able to check the "pulse" of your organization on a daily basis with the click of your mouse.

There are a number of KPI dashboard software products available. While it is recommended that you seek the assistance of an experienced advisor in selecting and setting up your KPI dashboard system, it is a worthwhile investment. A well-designed KPI dashboard that is user-friendly and displays the key performance metrics of your business with the click of a mouse, will be one of the greatest investments you can make, particularly if you do not have an accounting and finance background.

What is a KPI Dashboard

A KPI dashboard should be highly visual in nature, meaning it should consist primarily of graphs and charts that make it easy to compare the company's overall performance, such as: actual vs budget, current vs prior, company performance vs industry norm, and cash position or working capital. Choose critical elements such as: sales, gross margin, and profitability for example. The metrics should be tailored to your specific enterprise needs and those of your industry. It can be helpful to include comparisons to industry so that you can understand your position in the market relative to your competitors. The specific designs of a KPI dashboard can vary, but these are some of what I consider to be the most important elements.

Why is it important to get into the KPI Dashboard habit?

If you can't measure it, you can't manage it.

It really is just that simple. Getting into the habit of checking your company's performance on a regular if not daily basis is a critical discipline that will help you to stay focused in your decision-making. How are your pricing decisions affecting gross margin? Is your organization cash-positive? Is this a good time to invest in new equipment? Are my sales targets reasonable? How is my sales team performing? Are they achieving their individual targets? These types of decisions and more can be made with a clear picture of the potential impact they will have on the company's financial performance. After all, if you're not making a profit, you're probably not having fun, and well, frankly we think you should be having fun. After all, your business is your passion.

Don't have a KPI Dashboard?

We can help.

Your Turnaround Team advisor can help you with the selection, design and set up of a KPI Dashboard that fits your business requirements. A well-designed KPI Dashboard allows you to monitor the performance of your organization with a simple mouse click. It should be just that simple. If you need help with setting up your KPI Dashboard or are not satisfied with your current system, your Turnaround Team advisor would be happy to help. You can reach us by following the Contact tab on this web site.

Debra Farquharson is the CEO and founder of The Turnaround Team Inc.