KPIs - Key Performance Indicators are the set of tools used to measure your path to success!
Measurement provides the motivation we need to bridge the gap between knowing and doing.
How many times have you seen a "dead end" sign but took the road anyway. Only to turn around after a couple of miles. Or, had the extra burger when you know you are trying to lose weight. Or, put more salt in your food than needed after your doctor has told you to ease on the salt because of your high blood pressure. If you have ever had any of these experiences, your problem is not you do not know what to do but you choose to ignore your knowledge because admitting the consequences might mean you have to change. As a result, you drift through life, never really excelling, but just existing.
So what happens is you end up wasting time driving through dead ends, end up getting the stroke and all kind of diseases that go with being overweight. All of these could have been avoided if only you kept track of your KPIs. Your KPIs or key performance indicators is what helps you foresees the change coming and redirects you to a positive path.
When applied to business, key performance indicators allows us to run a more proactive business. Everyday there are thousands of events happening that affects our business. While we cannot control these events, we can control how we choose to react to them. For example, cash flow does not have to be negative, before we seek help. We could keep track of the events that leads to negative cash flow and avoid the actions that leaves us feeling stranded.
Because our environment is constantly changing, looking at your financial statements is no longer enough. You need a way of predicting actions that will impact your business even before they happen. These are exciting times, you can actually dream up your key results and develop performance indicators to get there.
Predictive accounting with KPIs is a different way of thinking about your business. Its a disciplined and proactive approach. What gets measures, gets improved.
When you are proactive, you scan the environment for actionable events and then create key performance indicators to track the progress towards the payoff. It's a great way to propel your business into the future.
I have been in the accounting field for over 15 years and in this time I have talked to so many entrepreneurs and seen so many financial statements. To accurately forecast you need key performance indicators. If not you could find yourself stuck in the past.
In this website, I will be exploring many tools, including how to find good metrics, different types of metrics to be used in different circumstances, how to forecast and budget accurately using key performance indicators and much more!
In addition, I will be sharing templates and advice not shared on this website with my subscribers. You can feel free to sign up below to get this premium content.
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