When you run a small business, there are tons of numbers involved. A lot of owners are focused on the basics like sales and expenses, and they trust their accountant to handle their statements. However, while an annual tax accountant can give you a reflection of your last year, you might not have a deeper understanding of what each line on your financial statements means.
CSI Accounting & Payroll has been helping small business owners understand their business financials - beyond taxes - for more than 50 years. We believe tracking them on a monthly basis is critical to the success of your business.
Here are the KPIs (key performance indicators) you should be tracking year-round for your small business.
Important KPIs to Track
You can always jump on a search engine or AI tool and ask it what metrics you need to track. However, KPIs are different for every industry and every business due to unique variables in how you operate and the environment you operate in.
If you own a restaurant, you will want to know how full your business needs to be to break even on a typical day. If you're seated at capacity, how quickly do your customers need to finish their meals so you can turn over a new table?
What if you own an auto repair shop? You will want to know how many cars you need to service to break even on a typical day. How quickly will you need to finish the average repair job so you can start the next one?
It’s more than just saying you’ll need a certain number of dollars in sales to break even. How much will go to your bottom line? What's your average sale per customer, and how does it compare to other businesses in your industry?
These are all important things to analyze in order to grow, but they still aren't a complete list.
How to Measure Your Own KPIs
You need to understand where your money is going in order to streamline your organization and increase efficiency. When it comes down to it, it's best to have an advisor on your side, but here's how to get started tracking KPIs on your own.
With this free checklist, you'll learn how to identify and calculate important metrics for your small business, including:
- Customer acquisition cost
- Customer lifetime value
- Break-even point
- Gross profit
- Net profit
- Total revenues
- Average revenue per employee
How a Monthly Accounting Firm Can Help
As we mentioned, an annual tax accountant can give you a reflection of your last year, but you might not have a deeper understanding of what each line on your financial statements means. If you've ever wished for a more thorough, year-round look into your finances, have you considered a monthly accounting firm?
A monthly accounting firm like CSI Accounting & Payroll will go beyond financial statements to help you find out what your business needs to do to maximize your profits throughout the year.
If you have questions about if monthly accounting is the best option for your business, our professionals are here to help! We'll examine your situation and discuss what we can do for you. Click the button below for a free consultation to see if we can be a match.
Not ready to talk? That's okay! First, learn more about the different types of advice a monthly accountant can offer you by clicking the image below:
