Key Performance Indicators (KPIs) are an important part of measuring the success of a business. Along with strategic planning, KPIs guide the way forward and inform financial and non-financial reporting. While many companies make mistakes when using KPIs, automation through financial analysis software helps define and monitor indicators and keeps companies on the path to success.
Using KPIs in Business
KPIs mean different things for different companies. For a sales organisation, an indicator could be the number of new contracts signed. For financial planners, it could be gross and net profit margins as well as operating expense ratios. In marketing, monthly traffic data makes for a good performance indicator. While KPIs differ by industry, the value they provide a business remains the same.
KPIs are used to monitor the health of the company and measure progress over time. They also help companies solve problems and meet key objectives. Financial analysis software makes it easy to set KPI measures, targets, data sources, and goals. Make them a part of financial and non-financial reporting and progress becomes much easier to track.
Organisations that pay attention to KPIs can easily adjust their tactics to achieve better results and financial analysis software gives them the tools and data to do this.
5 Common KPI Mistakes
KPIs are crucial to success, however, many organisations fail to make them work. Here are a few different mistakes companies make in strategic planning using KPIs.
1. Not Linking KPIs to Strategic Planning
The ultimate success of KPIs depends on how they inform strategic planning. Consequently, not using key performance indicators in developing and adjusting a strategy is a waste of time. Having clearly defined goals and objectives streamlines the process of linking to relevant KPIs.
2. Measuring Everything
You can go to the extreme on anything and that includes using too many key performance indicators. Therefore, it’s important to set indicators that are relevant to the success of the business. Just because something is easy to measure does not mean it should be. Too much information is as unhelpful as not enough. Choose the right KPIs and then use financial analysis software to track them.
3. Failure to Analyze KPIs
Key performance indicators by themselves don’t provide a complete picture. If you’ve taken the time to measure KPIs as a part of strategic planning, then you need to analyze the data. Data provides the insight needed to measure progress and make adjustments when necessary.
4. Not Updating KPIs
Another mistake organisations make when using KPIs as a part of strategic planning is a failure to update them. Therefore, it’s important to challenge them periodically and not allow them to become an easy-to-tick box on a checklist.
5. Failure to Act
A KPI is only as useful as a company’s willingness to act on the information it provides. Using financial strategy to align KPIs with goals and objectives provides benefits only when stakeholders make informed decisions based on the data.
Meeting Goals and Objectives
Managing and reporting on your organization’s goals and objectives has never been easier. Quickly and easily establish and report on your key KPIs with financial analysis software. The Maus KPI Dashboard allows organizations to create their own custom financial and non-financial dashboards in minutes. Identify trends before they become a problem and capitalize on opportunities. Sync your data directly from sources such as Xero, QuickBooks, and Excel.
Financial and Non-financial Reporting Using Maus Financial and Non-Financial Reporting
The Maus platform simplifies KPI and OKR management. Some features and benefits include:
- Customizable dashboards that allow you to track key metrics and then measure progress.
- Create financial and non-financial dashboards in minutes
- Interactive and customizable graphs & charts. Compare the data that’s relevant to you and your organization
- Automatically import your financial data from leading accounting platforms Xero and QuickBooks
- Import data directly from Excel and CSV files
- Ensure your strategic goals and KPIs are aligned with KPI management & reporting and strategic planning all under the one platform
- A strong customer support team that ensures you get the most out of your platform, with on-demand training & support
Book a Demo Today
Use KPIs to your advantage and ensure your strategic roadmap and performance metrics are aligned. Grow your business with Maus today. Book a demo today and get started.