Top KPI’s To Consider In Your Business


Do you ever wonder how successful your business is? Where do you even start to look to see whether your business is performing well? Where do you look to improve your current performance? KPIs, also known as key performance indicators, is the best way to help you understand key metrics about how your business is doing. But, what are they and how do you use them? We have a little bit of information to help you learn more about KPIs for your business and how to start measuring your success more efficiently.

A better view of your business

If you go to a doctor, they will use KPIs to measure how healthy you are. Whether it’s your blood pressure levels or how well you are feeling, this is a type of KPI for a medical professional. In a very similar way, this is how you would look at KPIs for your business. Within a business context, you may look at things such as gross profit percentages, debt to equity ratio and so on. KPIs are usually specific to a particular industry, for example, a cafe may closely monitor food cost and wages as a percentage of sales as KPIs. It doesn’t matter how big or small your business is, a key performance indicator can help you to determine what is driving your business profitability and to look at changes that could be focussed on to improve your bottom line.

Every business is different and therefore KPIs will be different according to each business and industry. However, the basic idea of how to measure the important features of a business is the same. Looking at a variety of KPIs can help you to get an even bigger picture of how well you are doing. By looking at various KPIs, you’ll be able to see your business from various perspectives and be able to make strategic decisions based on all of the data that you have for your business. It is about looking at the key metrics or components of your business which add up to give you your bottom line.

Choose suitable KPIs

Some of the things to consider include what industry you are in, where you are in your business life cycle, any unique circumstances you may have and your long term and short term business goals. Whether you operate purely online or whether you have a traditional bricks-and-mortar store is also something to consider for your KPIs. If you are not sure of what KPIs to focus on and which ones are important for your

business, having a chat with your bookkeeper can help you with this decision.

What is a KPI?

A KPI is a way of measuring your business and it’s effectiveness. This means that your KPI should be:


Obviously, this point ensures that the metric that you are measuring is relevant to you, your

industry, and specifically, your business.


This ensures that your KPI’s can be measured both in the long term and in the short term.


Relevant people in your business understand what this KPI means.


Those who are looking at the KPI’s will understand why this particular KPI is important to the


Examples of financial KPIs

As mentioned, every business is going to have various KPIs depending on their own personal business needs. However, there are a couple of key financial KPIs that are almost always important to all businesses.

These include:

Net Profit

One of the most simple and most effective measures of your success is a profit and loss report and more specifically looking at your net profit as a percentage of your turn over.

Having a look at your profit and loss statement on a regular basis (such as monthly or quarterly) can help you to identify times when you have less work and therefore make less money. This can then help you to develop strategies for these lower times in the year. It can also help you to see whether your business is growing over time and ensure that you are monitoring where your cash is going and whether all expenses are essential.

Accounts Receivable Value

One of the biggest impacts on cash flow is receiving the income for the job that you are doing. If you are not getting paid within a suitable time, your cash flow is not as efficient and therefore it can hinder your ability to pay your bills. If you’re not keeping track of your outstanding revenue, it could be months before you realise you have any outstanding invoices. Follow up on all of your invoices regularly according to your account terms to ensure that you do not end up with missing revenue, outstanding invoices and bad debt.

Other suitable Accounts Receivable ratios include Accounts Receivable Turnover and Average Collection Period.

Revenue by service

Depending on your business, you may have a wide range of services provided to your clients. Whether it’s a cafe selling a variety of meals or whether you’re running a web design agency and also have other services such as logo design, it’s a good idea to have a look at which services are providing you with the best revenue. You may be tracking all of your revenue as one lump sum, but if you look at which services are the most profitable for you, you’ll be able to look at where it is worth investing in the future.

The right software and the right bookkeeper

Tracking your KPI’s can be difficult if you’re not using the right software. A simple to use software, such as Xero is a great choice for many small to medium-sized businesses. Having a bookkeeper on your side to help you keep track and accurately report on your KPI’s is also ideal.

If you’re looking for a bookkeeper in the Brisbane region to help you with tracking KPIs and other bookkeeping needs, get in touch with the team and Diverse Business Consultants today.