Traditional accounting metrics are universal, with all businesses following the same accounting principals. More useful for managers are business KPIs – or Key Performance Indicators – which are the numbers that serve to identify the strength of your business at any given time. These KPIs vary between industries and companies, and learning to monitor those metrics is critical to business success.
Unlike financial accounting (that ties your numbers to universal metrics), or managerial accounting, that adapts that same system to more reflect your industry’s costs, KPIs are more divorced from accounting’s basis in manufacturing and trade and more built around today’s brand-centric service and manufacturing companies.
Companies will often have global KPIs that reflect corporate health, with key performance indicators developed for each department to help understand the state of health for that department. These metrics may be related, as a company wide KPI around lead creation is affected by the marketing department’s internal KPIs around brand engagement, web site visits, and other contact points. Similarly company financials like COGS – cost of goods sold – will be impacted by KPIs build around inventory turnover times as well as more manufacturing-centric KPIs tracking waste, loss, and shrinkage.
Our finance clients rely heavily on our help developing relevant metrics, as well as building systems and dashboards to display those metrics. We collect our accounting and finance data in the general ledger, but interface with a variety of CRM and ERP systems that collect your data, and use various visualization tools to display them. Popular visualization tools include Google Data Studio, Zoho Analytics, and market leader Tableau.