Accounting Procedure for Different IndustriesOctober 23, 2018
The Next generation business with new tools and software’sOctober 29, 2018
Key Performance indicators for great business
For ensuring that the business is functioning properly it is required to keep a tap on a few, basic ‘Key Performance Indicators for great business’ to assist in analyzing the overall business performance, as stated under:
- Positive Cashflow
- Cash inflows greater than cash outflows that occurs during the observing accounting period.
- Results due to the cautious management of incoming and outgoing cash wherein a balance is maintained between the expenditures and cash inflows.
- The other way round, a prolonged positive cash flow could mean not enough stock or decline in sales.
- Lower Attrition
- The calculation of attrition rate is crucial as it determines an organization’s performance.
- Ensures workforce strength and supportive HR system.
- Avoids hamper on productivity and saves on cost and time incurred to train new employees.
- Clearly defined pricing
- A revenue-generating aspect and so care needs to be taken in defining pricing by considering marketing factors like product quality, goods, manufacturing cost, local and global competition, brand, market region, and prevailing conditions.
- Differentiation in pricing should be outlined for purchase and sales order based on key points like quantity break, promotion or sales campaign, shipment or invoice date, vendor quote and other add on factors.
- All the tasks are automated to the extent possible
- Complex business processes demand automation for streamlining business functions which include marketing, sales, and workflow.
- It promotes the customized restructuring of labor force, usage of software application and tools to aid in accounting activities in order to overcome human restrictions and error.
- Clearly defined team structure
- Ensures roles and responsibilities have been assigned to-the-point for a coordinated, timely and balanced workflow.
- Results in complementing and balanced teamwork, greater productivity, avoid conflicts, transparent demarcation in roles and responsibilities get outlined.
- Problems are defined and solved immediately
- Problems are bound to occur, however initially defining them and finally getting a control over it.
- The timeline that it takes to measure, improvise and analyze the problem, before rectifying it, needs to be short to reduce stress while maximization of effort will ensure that minimal or zero impact occurs to the business functioning.
- Financial benefit, that a business incurs, reflects an enterprise’s success and is used to indicate how well the business performance is and its future as it gives a clear position of liabilities, assets and owner’s equity.
Above are some major Key Performance Indicators for great business however to measure growth there are several other parameters as well which we explore in our new blog post.
We at Meru Accounting along with expert consultant writes about such topics which is indeed helpful for business owners. For more information business related growth parameters keep reading our blog post.