Key performance indicators for great business
For ensuring that the business is functioning properly, you require keeping a tab on a few basics ‘Key Performance Indicators for great business’ to help analyze the overall business performance, as stated under:
- Cash inflows greater than cash outflows that occur during the observing accounting period.
- You should always maintain a balance between the expenditures and cash inflows for the cautious management of incoming and outgoing cash.
- The other way round, a prolonged positive cash flow could mean not enough stock or decline in sales.
- The calculation of attrition rate is crucial as it determines an organization’s performance.
- Ensures workforce strength and supportive HR system.
- Avoids hamper productivity and save on cost and time incurred to train new employees.
- A revenue-generating aspect and so you need to take care when defining price. So, you should consider marketing factors like product quality, goods, manufacturing cost, local and global competition, brand, market region, and prevailing conditions.
- We should outline differentiation in pricing 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.
Automates all tasks 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 the software applications and tools to aid in accounting activities to overcome human restrictions and error.
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, avoiding conflicts, the transparent demarcation in roles and responsibilities get outlined.
Define problems and solve immediately.
- Problems are certain to happen, however initially defining them and finally getting a control over it can help you a lot.
- 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. Therefore, it is used to show how well the business performance is and its future. It also 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, which we explore in our new blog post.
We at Meru Accounting along with an 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.