Identify and use your Key Performance Indicators

1. Start with Financial Indicators

For a KPI to be useful, it must be easy to define and measure. That’s why many companies begin with financial KPIs. They are simple to set up, rely on existing accounting data, and require little investment.

Examples include:

• Balance sheet indicators: bank balance, Days Sales Outstanding (DSO)

• Profit and loss indicators: revenue, gross margin, operating profit

These financial KPIs are the minimum standard. Once in place, you can move on to operational KPIs derived from ERP or CRM systems, such as:

• production volume

• number of orders received

• headcount (FTEs)

• average margin per project

2. Follow Up Regularly

Update KPIs often and use them in your daily management reporting. Compare them with:

• budgets

• previous periods

If a KPI falls short, take action. For example, challenge the team to reduce customer credit days by 10% next month. Show how this action improves cash flow. Linking KPIs to bonuses can also encourage improvement.

3. Build a Dashboard

Monthly reports are not enough. Many companies now use dashboards to monitor KPIs weekly, daily, or even in real time.

Operational KPIs predict what is coming. Tracking them lets management act quickly, not after the fact.

But a dashboard is only successful if people use it. That means:

• it must be easy to access anytime, anywhere

• it should look clear and attractive

• it must highlight the most important measures

The good news: implementing a dashboard doesn’t have to be expensive. Tools like BrightAnalytics connect easily to ERP and accounting systems. They raise reporting to a higher level and boost employee engagement. A dashboard is not just a reporting tool, it’s a way to align your team and keep everyone moving in the same direction.

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