My Key KPI: Volume and churn

My key KPI
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Welcome to ‘My key KPI’, our weekly content series where we ask CFOs and FDs what metrics and measures they use to drive their businesses forward.

The aim is to understand how different finance professionals, across a broad array of industries and sectors, use data to inform their decision making.

In this week's edition, AccountingWEB hears from Neha Mittal, the CFO of Market Invoice, a business finance company founded in 2011.

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Neha Mittal likes to keep her scenario planning simple. The first is business as she sees it: "If everything is going to plan, here’s what we believe we will achieve in terms of number of customers and what volume we’ll be funding.

"Then we have an ambitious case: if our newer products were doing really well, this is what it would look like," she continued. "This is what the headcount is going to look like, this is what marketing will look like. Basically, if we get to the high growth case, do we have enough resources to reach that high growth case."
 
And then, finally, there's the low growth case. "If things were slower because of a sudden change in the market, what do our resources look like? What should we be looking at in terms of cash conservation?"
 
Mittal's key KPIs play a central role in all of these cases. "One of our favourite as a company is the volume we are funding," she said. "Because that overall number is showing us how many companies we’re helping and how quickly we’re growing. As a story that’s my favourite one.

"As a detailed KPI, it's how many clients are sticking with us. So a churn metric, if you will. And that feeds into our monthly recurring revenue."

Mittal calculates this by looking at old clients' trading history. "So hypothetically, if I acquire 20 customers at the beginning of last year, I would look at the data to see how many of those customers continue to trade with at the beginning of this year.

"Very simplistically, if 15 of that 20 continues to trade with me, that’s a 75% retention rate. Then we’d look at trading history to see what the client’s lifetime value is."

Market Invoice is a high-growth startup with multiple investors, and Mittal frequently presents the numbers to the business's different stakeholders. "If we’re behind on some KPIs, we make sure to present those because the investors, ultimately, want the company to do well. Our job, or more specifically my job, is to present that information as well and challenging them to say ‘this is what we should be doing differently’.

"As much as we present the good numbers: we also present the bad. And we look to our investors as leverage and where we can use them to grow."

About Francois Badenhorst

Francois

I'm AccountingWEB's business editor. Feel free to get in touch with comments, tips, scoops or irreverent banter. 

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