Recent research has found that the majority of business owners (60%) are producing accurate and timely financial reports, but only 22% of business owners know their Key Performance Indicators and regularly compare them to industry benchmarks.
Further research has shown that past numbers based on redundant data are only valuable if they are timely but are required to run your business. For businesses owners who want to improve the capital value of their businesses, historical profitability, cash flow and financial position reports are not enough. They lead to reactive decisions, a little like a miner reacting to its canary falling off its perch.
KPI’s commonly known as Key Performance Indicators are often based on historical redundant data. KPI’s such as debtor’s days, profitability percentage, gross profit percentage and so on are examples of such.
