1. OUTSTANDING REVENUE
Billing and collecting are at the fulcrum here. Unclaimed revenue hugely impacts your cash flow and your facility to pay bills. Following up on your receivables and applying payments to your invoices monthly is crucial. At tax time, you could face wasted hours updating your receivables listing, overpaying on your taxes and bad debts.
2. PROFIT & LOSS (P&L)
Profit and Loss reports are a common indicator of fiscal success. The record of your company’s expenditures and income examined over a particular time period. It shows either a loss (expenses exceeding income) or a profit (income exceeding expenses). Scrutiny of your monthly P&L helps you monitor where your cash is going for expenses, helps you identify the months when you tend to make less money, and is a great indicator of how your company is growing over time.
3. REVENUE BY CUSTOMER
At the start, you’re grateful for customers of any kind. However, successful companies are mostly those that indicate their most valuable customers, develop relationships with them, and work to bring in new customers with a similar profile. Examining your income on a per-customer basis, you can pinpoint those who are most important to your bottom line, and work to make those relationships more profitable.
4. REVENUE BY SERVICE
Many small service-based companies provide an array of services. Comprehending where most of your revenue comes from inform you how you should market, grow and staff your business. In a perfect model, you need to dedicate more time to the activities that make the most money and improve those particular services.
5. SALES TAXES
Checking on the sales taxes you’re collecting from customers and paying to the government is a necessary part of managing your business. You must overcome the tendency to collect tax and combine it with income. It’s easy to avoid fines and penalties for late payments, and routine sales tax reporting will save you resources, and help you continue to be more effective at tax planning.
The five key performance indicators listed above will keep you evolving your business based upon important information that every company should keep an eye on.