The most effective way to find this direction is through KPIs or key performance indicators. You cannot have the same set of KPIs for all businesses as they vary across industries. For instance, standard KPIs such as number of clients and percentage sales revenue might not be the right indicators for a seasonal business apart from the peak season. Nevertheless, KPIs are important for these businesses too.

To find the KPIs that suit you best, you need adequate statistics in hand so that you set meaningful standards of comparison. These numbers can only be got when you can organize data and also compare them with other businesses in your realm. If you have an accounting and bookkeeping software, this effort becomes a breeze. It helps you to organise your data in a manner in which you get instant analysis. Of course, you might have to have an add-on to enhance this function in your business management applications.

The Right KPIs Take Your Business in the Proper Direction

Let’s take a scenario where you suddenly see a decline in sales. Isn’t it important to know the reason behind this? If you have set proper benchmarks and KPIs through your business data, finding the real problem behind drop in sales becomes easy. As a result, you can quickly take corrective actions to put your business back on track.

Classifying KPIs for Your Business and Setting them Up

The most effective way to find this direction is through KPIs or key performance indicators. You cannot have the same set of KPIs for all businesses as they vary across industries. For instance, standard KPIs such as number of clients and percentage sales revenue might not be the right indicators for a seasonal business apart from the peak season. Nevertheless, KPIs are important for these businesses too.

To find the KPIs that suit you best, you need adequate statistics in hand so that you set meaningful standards of comparison. These numbers can only be got when you can organize data and also compare them with other businesses in your realm. If you have an accounting and bookkeeping software like Xero, this effort becomes a breeze. It helps you to organise your data in a manner in which you get instant analysis. Of course, you might have to have an add-on to enhance this function in your business management applications.

The Right KPIs Take Your Business in the Proper Direction

Let’s take a scenario where you suddenly see a decline in sales. Isn’t it important to know the reason behind this? If you have set proper benchmarks and KPIs through your business data, finding the real problem behind drop in sales becomes easy. As a result, you can quickly take corrective actions to put your business back on track.

Classifying KPIs for Your Business and Setting them Up

All this talk about KPIs is a waste if you have no idea how to differentiate various processes and set KPIs for them. Let’s look into some of these in some detail.

Product/Service: For a business owner, a product or service that does not perform is a waste. For instance, if you are a retailer who has stocked a particular product for long and if it is just not moving, it is not only eating up your space but also your investment. When you have several products, it becomes tough to analyze which product is performing and which is not. An business analysis software lets you instantly identify such products. It automatically analyzes information that is recorded in Xero and gives you a clear picture.

People: If you are seeing that your workforce is not generating expected results in spite of continued efforts, then you have to look into things that are beyond what is obvious. If you had already set KPIs for training, there is a good possibility that your employees would function optimally in a live business environment.

Another important KPI is employee turnover. An adequate KPI in this realm lets you get a grip on the employee turnover. Remember that it is not enough to maintain a particular number of employees in your organisation. You need a workforce that is well-versed with your organizational goals and principles. This is only possible when you have reduced employee turnover.

Marketing: Not enough can be said about this integral process of any business. To know whether your marketing is yielding results, you need to be able to evaluate the effort. Remember that a CRM software can help you records all your proposals, presentations, bids, and unsolicited business inquiries. On the other hand, it also records the sales conversions that you achieve. Now, all you have to do is adopt an add-on that can successfully analyze this data and give you the marketing performance.

Processes: Your business might have several processes that are linked to various departments. Evaluating a particular process becomes almost impossible without the aid of software. You might have come up with a process for accounts receivable and think it is foolproof. But has the thought ever crossed your mind that the amount due to you and not yet received is as good as lending your customers an interest-free loan? With an accounts receivable management software, you can quickly analyze the average aging process of receivables and improve upon this time.

A cloud-based business application, also allows you to glean through the data from any device that can be internet-enabled, so you can monitor the workflow efficiency from anywhere. In fact, it allows you to improve upon your workflow processes so that your business performs better.

Place: Each of your business area needs to have KPIs if you want to run your organization effectively. On top of that, you need to set goals for each KPIs. Once you do that, an as entrepreneur, you need to create KPI dashboards so that you can monitor the performance against the set goals. You need a tool that allows you to view results frequently and seamlessly.

Most importantly, you must be able to adopt new KPIs as your business evolves. An add-on like Fathom will help for this effort. It is a great tool that allows you to analyze, report, and benchmark your performance across the board. It even helps you to create new KPIs and choose from an existing set of KPIs. It does not stop at that and goes further allowing you to monitor the performance against the targets that are set.