My Key KPI: Volume and churn
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.
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.
"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."
"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."