Key performance indicators, or KPIs, are critical tools to monitor business health. With Sage Intacct, you can measure and visualize customized KPIs to inform better and more timely decision-making.
Why You Must Keep Your Eyes on KPIs
Key performance indicators (KPIs) are best known as metrics that big businesses use to understand and track their financial health, but they’re just as important for nonprofits, small businesses, and services-oriented companies.
Let’s look at why and how to keep your eyes on KPIs.
Why KPIs matter
At their most basic level, KPIs let you know how your business is doing today compared to yesterday. For example, a consultant might have a KPI for how many appointments he makes every week—that’s one of several KPIs he could use to measure the health of his business.
KPIs alert you to trends over time that you might otherwise overlook. For example, because he is closely tracking his appointment KPI, the consultant might notice a declining trend in the number of appointments he’s making from one month to the next, even though he continues to feel busy on a day-to-day basis.
This leads us to the main reason KPIs matter, which is that they can inform timely business decisions. Once the KPI alerts the consultant to the fact that he’s making fewer appointments, he might decide to do more outreach and marketing before the trend becomes truly worrisome. Conversely, if his KPI shows an upward trend in the number of appointments, that might spur him to take action to grow his business before he has to turn away new clients.
How to track KPIs
KPIs are only helpful if all of the key stakeholders buy in and recognize the value of tracking the KPIs over time. Stakeholders also should understand how each KPI is calculated and what each one measures, so be sure to keep your KPIs focused and simple, with clear definitions and calculations.
You don’t want to spend hours calculating and tracking your KPIs—and there’s no need for that if you use Sage Intacct or other best-in-class cloud-based accounting software solutions that automatically calculate and report on KPIs.
A further advantage of using an ERP solution like Sage Intacct is that you can easily drill down to granular details and compare performance across any business driver you care about. All the data you need can be provided in customizable dashboards that can be accessed securely from any device.
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