Key performance indicators (KPIs) are some of the most valuable pieces of information a high-growth company can find. KPIs can help you understand what makes your business tick and provide actionable insights for growth and improvement.
At Compass East, we offer KPI development as a part of our accounting services. Our experts work with your business’s key decision-makers to determine the performance metrics that progress toward financial goals. You can monitor KPI informant from our robust financial reporting dashboards and visualization tools. These powerful resources can be game-changers for fast-growing businesses, so inquire about our KPI development and visualization services today.
What Are KPIs?
Success in your industry comes through meticulous planning and execution. Your business has financial goals it needs to meet. Acknowledging those goals and determining how to achieve them are the first steps toward achieving your growth goals. But along this journey, you need ways to verify that your organization is on the right path in real-time. KPIs establish objective measurements your business can reference when assessing progress toward your goals.
A KPI is a precise measurement of your company’s performance within a specific category. KPIs can apply to the organization as a whole or zoom in to track individual employees. Some KPIs will be simple, like your revenue per employee, monthly revenue growth, and cash burn. Others can be more involved, such as your labor productivity metrics, customer acquisition cost (CAC) and lifetime value (LTV).
KPIs are important because they signify your company’s progress toward larger goals. Achieving a KPI shows that your company is on the correct trajectory. Falling short of a KPI unveils an opportunity to improve relevant processes and strategies.
Financial KPIs Drive Growth
Financial KPIs help businesses like yours achieve goals. A financial KPI measures financial outcomes as they appear in your accounting data. You can compare the data to goals that prioritize profitability, efficiency, solvency, valuation or liquidity. Your KPIs will help you determine if current revenue, profit and expense figures indicate forward progress toward greater financial goals. By implementing financial KPIs, your business will find actionable insights and opportunities to improve operations.
Our Approach to KPI Development for High-Growth Companies
Compass East offers financial KPI development services for high-growth companies. Our collaborative approach and unique focus on high-growth companies allow us to determine the most effective KPIs to implement and how to interpret them for company growth.
Our KPI development strategy is a part of a bottom-up accounting revitalization. We establish the financial reporting infrastructure and technological systems necessary to develop and monitor targeted KPIs. By restructuring your company’s chart of accounts, we’re able to conceptualize financial groupings that serve as the basis of your KPI development.
After we build the infrastructure and determine the most salient KPIs, you’ll recognize insights that direct business practices toward further growth and improvements.
KPI Monitoring
High-growth companies need to watch their metrics if they want a scalable business that can keep pace with their growth. As KPI developers, we help you determine which metrics your business can track. But there’s more to successful KPI implementation than deciding what to study. You need an intuitive way to view and interpret the data. At Compass East, we help you maximize your KPI strategy by providing a virtual dashboard.
Our visual dashboard makes it easy to generate reports and understand the nitty-gritty of your KPIs. We implement cloud-based technology that delivers sleek and color-coded graphics for at-a-glance comprehension. You can access our KPI monitoring tools from any device and share information with key decision-makers in your organization. With Compass East, we can build dashboards for two types of KPI profiles, Financial KPIs and Operational KPIs.
Financial KPIs
Our experienced FP&A teams understand the factors that indicate success in your business. With Financial KPIs, Compass East pulls financial data directly from your accounting software to provide an understanding of the historical financial trends of the business. Typically financial KPIs are historical in nature. We utilize budgets, goals, and benchmarking to measure against performance. Some Financial KPIs we can track include:
- Revenue and Revenue Growth
- Sales and Marketing % of Revenue
- Free Cash Flow
- Cash Burn
- Gross Profit Margins
- Net Income and EBITDA
- Revenue and profit per employee
- Accounts receivable turnover rate
- Working Capital and Liquidity ratios
- Operating leverage
Operational KPIs
While Financial KPIs take into account financial data found in the financials, Operational KPIs take into account data tracked by your sales and marketing teams, operations teams, and Management teams. This data could be stored in your CRMs, operational software, or internal scorecards. Operational metrics combine the information derived from these sources and combine them with financial data to be forward-looking and predictive in nature. With insights from Operational KPIs, Compass East can help you build actionable forecasting and financial models to create accurate predictions of the future to help make strategic decisions on growth objectives, new hires, and expense management. Examples of Operational Metrics include:
- Lifetime value (LTV)
- Customer acquisition cost (CAC)
- Gross Retention Revenue
- Net Retention Revenue
- ARR (Annual Recurring Revenue)
- MRR (Monthly Recurring Revenue)
- Subscription Metrics
