|Key Performance Indicators (KPIs) – Using accounting software to help your clients be more profitable|
|(Analysis and MIS)|
|Wednesday, 01 June 2011 00:00|
How do your clients know how their business is actually doing? At year-end, when you close the books and send them their financial statements and tax returns to sign? Read more to understand a great approach to helping your clients be more profitable by using Key Performance Indicators (KPIs).
How do your clients know how their business is actually doing?
“An activity measured, is an activity managed!”
There are thousands and thousands of ways to measure business performance. However, the key is to:
All companies use the most common KPIs that arise from:
But, are your customers measuring and analyzing the most appropriate KPIs? Or, any KPIs at all? Most industries have a set of “best practice” KPIs that help their member companies determine how their business is doing against industry average and better performance indicators. A great place to learn more, research, and find the most appropriate KPIs for your, or your customers’ business is the KPI Library.
Using ERP/accounting software to improve business performance...be more profitable
Today’s modern and sophisticated ERP/accounting software is built on stable, and highly dependable, relational databases. Relational databases allow for the ability to compare an infinite number of data sets (imagine reporting on sales by region, by sales person, by product). Data in the database can be cross-referenced, and then presented into reports, which personnel and management can use to monitor, correct and improve company performance - from top to bottom. ERP/accounting systems have sophisticated reporting tools that allow for a company to report on a set of KPIs, that can then be built into a performance dashboard, individualized for each and every system user.
Your clients are already using the most common financial statement ratio measurements (liquidity, profitability, asset activitiy, capital structures, etc.) as primary KPIs. The KPI Library provides hundreds of more sophisticated financial statement ratio KPI examples.
But, what about measuring business activities beyond the financial statement? Capture, measure, and analyze operational activities to gain additional insights into revenue, cost and profitability:
Key Performance Indicators should also be used in manufacturing, delivery, warehousing, transportation/delivery...and much more. If the data can is captured, it can be measured; and then reported on as a KPI to gauge business performance.
Help your clients improve their business performance by assisting them to implement KPI reports & dashboards, and understanding how to use the information to improve their business operations.
They’ll thank you for it!