Do you feel like your business has gotten too big for you to manage? These simple KPIs will tell you whether it’s going in the right direction.
KPI stands for key performance indicator. It’s a term used to measure the performance of an entity against expectations. It helps the management decide which areas to improve and which to maintain.
Companies that provide Canadian tax and accounting services in Canada can use software like Xero to access dashboards that show stats against different metrics. With the help of those metrics, you can better track your business performance:
Every business relies on sales for their revenue, and the more sales, the better. By comparing your month-to-month sales, you can tell how the interest in your product/service is increasing or decreasing, and the marketing efforts can be adjusted accordingly.
This metric can also tell you the performance of salespeople. If the numbers indicate that the salespeople aren’t doing as well as they should, you may need to plan more training sessions or optimize the sales process.
Cost of Acquiring Customers
Your customer dashboard gives you can idea of the number of new customers you acquired over a given time period. After comparing that to your marketing costs over the same period, you can determine the amount of money spent in acquiring them.
For example, if your marketing spends in Q2 was $1000, and you registered 50 new customers during that quarter, then the cost per customer comes out to $20.
Customer Lifetime Value
You have a list of all your customers, how long they stayed with your organization, and how much money they spent. By finding out the average lifetime values of all your customers, you can develop several insights that’ll help you make better decisions.
This will also help you determine what actions to take regarding a customer. This may include giving them incentives to stay on board, determining how long you should retain a customer before they are fully profitable and when you can “fire” bad customers.
The numbers can also help you adjust your marketing budget accordingly so that you know where to cap your budget.
It’s essential to keep track of your inventory to see if it’s at the optimum level. Too much stock could lead to high storage costs that eat into the profits. Using smart software, you can easily find out the reason behind a surplus of inventory and work to make sure that it doesn’t happen again.
Suppose a vendor had a discount on stock, and you decided to purchase more stock than usual to benefit from the situation. In this case, the software can help you analyze whether the additional costs offset the increased profit margins.
Let Business Advisory Services Help You Determine Your KPIs
If figuring out your own KPIs and extracting insights from them sounds like too much work, then we can help by providing business advisory services in Toronto.
We use cloud-based accounting solutions like Xero to keep track of all your numbers and generate insightful reports.
Be it sales figures or making the most of your staff, we can help you make informed decisions that accelerate business growth. Contact us to book a free consultation, and visit our website to see all our services and the raving testimonials left by customers