Key Performance Indicators - Complete Controller

KPI (Key Performance Indicator) -measurable values demonstrate how efficient a corporation is at attaining the business’s key objectives. KPIs are used for the evaluation of success in the attainment of targets.

 KPI must be:

  • Well-defined and measurable
  • Well communicated to all departments of an organization
  • Vital to achieving goals
  • Valid to Line of Business Check out America's Best Bookkeepers

Financial Metrics

  1. Revenue: it is one of the most significant performance indicators to evaluate the success of the organization. Bookkeeping helps you in evaluating revenue.
  2. Expenditure: calculate cost-effectiveness to find out the best methods for reduction and managing of costs. Expenses are determined from good bookkeeping practices.
  3. LOB profits vs. objective: It evaluates actual profits and projected profits to identify a department’s performance.
  4. Expenditure Of supplies Sold: evaluate profit margin by calculating production costs and assessing product markup and actual profit margin.
  5. Day transaction Outstanding: better the accounts receivable, the better is the efficiency of the organization.
  6. Sale by area: analysis of sales area-wide helps make better strategies in areas where sales objectives fail.
  7. LOB operating expense Vs. Budget: comparison of forecasted budget and actual overheads helps in creating an effective budget for the future.

Customer Metrics

  1. Client Lifetime Value (CLV): CLV helps determine the value received from a long term client of the organization. This is useful in keeping the best customers.
  2. Client Acquisition Cost (CAC): it helps in evaluating the cost-effectiveness of a marketing campaign.
  3. Client Satisfaction & custody: by making customers happy and satisfied, you encourage them to become regular customers.
  4. Net Promoter Score (NPS):  make a survey quarterly and evaluate its growth for long periods.
  5. The number Of clients: this is a simple and straight forward KPI like Profit—the number of customers gained or lost to determine whether customers’ needs are met or not. Check out America's Best Bookkeepers

Process Metrics

  1. Client Support Tickets: analysis of CPT helps in creating a successful customer service dept.
  2. Percentage Of manufactured goods defects: the lesser the number, the better it is performed.
  3. LOB effectiveness evaluates: Efficiency is measured by the number of products manufactured in specific periods.

People Metrics

  1. Employee Turnover Rate (ETR):  high ETR requires investigation and evaluation of packages and organization culture.
  2. Percentage of Response to Open Positions: Many applicants depict that the organization is doing well and people want to work with you.
  3. Employee Satisfaction: the larger the number of happy employees, the healthier the organization.
  4. Retirement Rate: This is important for developing strategic workforce plans.
  5. Knowledge Achieved With Training: determines the value of employee training and knowledge enhancement.
  6. Internal Promotions vs. External Hires: this metric is valuable for determining the succession planning of the organization.
  7. Salary Competitiveness Ratio (SCR): used to assess the competitiveness of compensation options. Check out America's Best Bookkeepers

Customer Metrics

  1. Customer Churn Rate: determines the percentage of customers who stop purchasing or availing of the service.
  2. Contact Volume By Channel:  determines the number of customer requests and the customer’s communication method, i.e., email, phone, or other.
  3. Percentage Of Customers Who Are “Very” Or “Extremely” Satisfied: Determines the opportunity to survey customers’ expectations.
  4. The number Of New Vs. Repeat Site Visits provides differentiation of prospective clients and website traffic.

Financial Metrics

  1. Cash Flow from Financing Activities: demonstrates financial strength.
  2. Average Annual Expenses To Serve One Customer: the average sum required to serve one customer.
  3. EBITDA (Earnings before Interest, Taxes, Depreciation, & Amortization): Formula: (Revenue) – (Expenses Excluding Interest, Tax, Depreciation & Amortization) = (EBITDA).
  4. Innovation Spending:  the higher the spending figure, the more the value of innovation in an organization.
  5. (Customer Lifetime Value) / (Customer Acquisition Cost):  this value should be greater than one.

Conclusion

Periodic evaluation of KPIs helps make a better strategy for entrepreneurship. It guides in making adjustments necessary for growth and expansion.

Check out America's Best Bookkeepers About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks™️ file, critical financial documents, and back-office tools in an efficient and secure environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity. Check out America's Best Bookkeepers