When it comes to business growth, companies are increasingly looking to their accountants and financial advisors for guidance.
What they’re seeking is access to those core metrics so crucial to the development of every small and medium business. Let’s take a look at some of those essential KPIs your clients will expect you to keep track off on behalf of their business.
And, at the same time, remember these are metrics that will help you monitor the performance of your own company, too.
1. Net Income
Probably the most crucial KPI for any business. Can you see at a glance if your net income is increasing or decreasing?
This is one of the most important metrics on your dashboard as it indicates the success of your business – or, crucially, highlights if you have a problem.
2. Gross Income
By looking at how much profit you make before deducting expenses, you can get an indication of your production and employee costs. This allows you to set goals to raise income and reduce expenditure.
3. Monthly Recurring Revenue (MRR)
Monthly recurring revenue is consistent income received each month. By monitoring it, you can track an organisation’s lifecycle and development. KPIs will let you measure your progress against growth objectives.
4. Customer Lifetime Value (LTV)
Customer lifetime value measures the amount of money a customer brings in over the entire time they do business with your company.
To calculate this, you need to know how long the average customer has been with you, and then how much money the average customer brings in each month. This is a useful indicator that will help you spot upsell opportunities or advisory services that can be added-on – helping you boost revenue.
5. Cost of Acquiring Customers (CAC)
With the rise of online companies and web-based advertising, this is a metric that’s increasingly being used. Essentially, can you quantify the cost of persuading your customers to do business with you?
A CAC KPI will help you to focus your efforts on the most cost-effective methods of acquiring new clients.
6. Net New Customers
It’s what all companies are striving for – acquiring new business. KPIs will help you track how your sales teams are faring when it comes to bringing in new customers. And maybe from a new demographic? The results may surprise you.
7. Retention Rate
How good are you at retaining your customers? This is an essential key performance indicator as it quickly highlights if you have a problem.
If your clients aren’t sticking around, there’s a reason why and it’s time to look at your product and service offerings and your customer service.
8. Net Promoter Score
Net promoter score is a KPI that focuses on measuring customer loyalty. It was introduced in 2003 by Fred Reichheld in his Harvard Business Review article: One Number You Need to Grow.
The principle is straightforward. Rather than asking your customers to complete lengthy questionnaires, you can simply ask ‘How likely is it that you would recommend our company to a friend or colleague?’
The aim of this KPI is to create a meaningful score based on customer loyalty behaviours. It’s used to improve customer experience, and, in turn, your acquisition and retention rate.
9. Turnaround Time
A turnaround time KPI can help you measure how closely you meet your clients’ expectations. It also helps you monitor your employees’ or teams’ productivity – giving you insights into both over- and under-performance.
10. Useful Vanity Metrics
While the KPIs we’ve looked at so far have been focused on company growth, a Vanity Metric can cover pretty much anything that’s measurable. These metrics are generally a little less useful to the bigger picture, but they can sometimes be worthwhile tracking.
Website visitors, social media followers, page views, subscribers – the value of these can be difficult to quantify. However, if you have the tools in place to track these KPIs, then it’s worth doing. These indicators can give you valuable insights into how well you’re delivering your message to your target audience.
Creating Your KPI dashboard
Now we’ve looked at essential business KPIs, it’s time to explore the most viable methods of harnessing the data you’ll need to supply these metrics.
To help you gain the business intelligence you need to track your chosen KPIs, Microsoft has designed Power BI, a cloud-based business analytics service that uses live and real-time dashboards, interactive visual reports and mobile apps to provide a single view of critical business data.
Power BI takes the burden away from overworked employees who have to rely on manual processes to analyse data. In its place, it provides easy-to-use dashboards with visualisations that bring information to life.
Power BI dashboards show visualisations from data that resides on-premise and in the cloud. As a result, you gain a consolidated view across your business regardless of where the data lives.
Crucially, Power BI simplifies how you interact with data, allowing you to explore data further by drilling through the dashboard into underlying reports. When you discover new insights, you can pin them back to the dashboard to monitor performance going forward.
And with automated insights, you can discover patterns and trends from your data that would be much harder to reveal by manual analysis alone.
Unlocking Sage 50 Data
Taking this a step further, Axon has created BI GO, specifically to unlock the actionable data that’s stashed away in Sage 50. Finance departments can now use the intuitive analytical capabilities of Power BI to bring Sage 50 data to life.
BI GO gives you the ability to provide your clients with the metrics they need to make informed decisions about their companies. By setting KPIs, they can quickly see which aspects of their business are working, and which aren’t. Armed with this intelligence, they can start to make data-driven decisions to improve performance.
From your point of view, BI GO allows you to use the power of data locked away in Sage to give your customers a more valuable service – one that will set you apart from your competitors.
Book Your Free Dashboard Demo
If you’d like to find out more about BI GO and Microsoft Power BI, get in touch for a free demonstration.