What is your company vision? Does your current performance reporting show your achievements against this vision? Even if your sole aim is to generate as much profit as possible, just looking at your profit and loss will not give you all the insight into why you are achieving the results you are.
How should I effectively measure performance?
- You need metrics that cover a broad spectrum of the business, covering the key influences on the business. These should usually include people (i.e. your staff), customers, operations and financial performance.
- The metrics should link to your vision and strategy (i.e. if you want to be the most popular company in your sector, you should be measuring either sales or customer satisfaction)
- Consider the impacts of each metric on one another. For example a low customer satisfaction rating will suggest lower future sales and income unless urgent steps are taken to solve the issues faced by your customers.
What will my ideal report look like?
- It should be no more than one to two pages
- It should have a visual representation of how you are performing (i.e. traffic light system using green for good and red for improvement required)
- Make sure your performance reporting has a combination of visual and numerical pointers!
- The report will highlight the key areas of the business you need to improve to achieve your vision. You should use this analysis to generate ideas on how you can improve your business.
- When coming up with options, also consider how these could impact performance across your other key performance indicators. You don’t want to solve one issue but create another.
For you to truly achieve your vision, you need the right reporting to set you on the path to success!
If you would like a FREE financial health check for your business, or alternatively support with developing effective reporting, please contact Paul at Enrich Accounting here, on 07403 407455 or at email@example.com