Using technology to track key business metrics
It’s important for all businesses, small or large, to have defined key performance indicators (KPIs) that they use to measure how effectively they are performing against their business goals.
Whether these KPIs are tracked in high-tech analytics dashboards or manually on Excel, it’s important that they are measurable, achievable and related to a specific objective or goal. Identifying and tracking KPIs helps you and your team to understand your business goals and identify potential risks
What are the benefits of using cloud technology to track KPIs?
Cloud technology enables you to access your financial data 24/7, wherever you are. By connecting your cloud-based accounting package to an online dashboard, you are able to track and report on your KPIs in real time. This means that you can spot opportunities and risks more quickly, which in turn means you are able to make timely and informed business decisions. Using a financial dashboard enables you to analyse historical data trends, but more importantly, to plan for the future.
Using cloud based software also allows for better collaboration. You can share your cloud dashboard with members of your team, as well as your accountant, to facilitate information sharing and aid decision making.
How do you choose the right KPIs to measure?
Every business owner will have a different idea of what success looks like. Some businesses will be aiming for rapid growth and will not expect to make a profit initially. Other businesses will be looking to grow organically with hopes of making a generous margin. The key is to start by working out what you perceive to be your success indicators and then build your KPIs around these metrics.
To develop relevant KPIs you will need to consider the industry you are in, the size of your business, your goals, where you are in your business lifecycle and where you’re looking to grow to (e.g. are you looking to expand into new regions or products, or perhaps grow the business globally?). All of these factors will have an impact on what is realistic and achievable when it comes to measuring success.
As a starting point, it’s always good to speak to an accountant about your ambitions.
Which factors should I consider when choosing the right dashboard for me?
There are lots of technology solutions available to help you track your KPIs, but it is important to choose the right one for you. It is always worthwhile to consider:
- Can you customise the dashboard so that it is relevant to your business and bespoke to your needs?
- Are you able to connect your cloud accounting package to the dashboard? For smaller businesses using Excel to track their finances, is there an option to upload data from a spreadsheet?
- How frequently is the dashboard updated? Is the data pulled through from your accounting package automatically (in real time) or is a periodic, manual synchronisation required?
- Does the dashboard allow you to generate forecasts and budgets for the future?
- Is the dashboard intuitive to use so that you can clearly interpret the data?
- Does the dashboard facilitate the delivery of actionable insights, i.e. alerting you of risks or opportunities that require a certain action to be taken?
The Propel by Deloitte analytics dashboard is an all-in-one forecasting engine and reporting tool, designed to track business performance 24/7 to help you make better-informed business decisions. Contact us to sign up for a free trial.