Download 2025 Tax Deadline Calendar

888-600-0075      |     Upload via SAS Nitro

News

Elevating Business Performance with KPIs

In today’s ever-evolving business landscape, developing and monitoring Key Performance Indicators (KPIs) is paramount to providing clarity and focus to your strategic plan. These metrics offer invaluable insights into your business’s vitality and performance–especially if targets are being missed–as well as communicating goals across the entire business’s team upon which success will be quantified.

A great key performance indicator should accomplish all the following:

  • Outline and measure your organization’s most important set of outputs.
  • Be the foundation of your performance management process and confirm whether progress is being made against your strategy.
  • Represent the key elements of your strategic plan that express what you want to achieve by when.
  • Measure the quantifiable components of your strategic goals and objectives.
  • Measure the most important leading indicators and lagging measures in your organization (more on this in our next blog!)

Most organizations have 5-7 KPIs to manage and track their progress against their stated goals.

(Pro tip: When you track too many goals, it can get discouraging and goals can become blurry. Stick with 5-7!)

5 Essential KPI Elements

So, what does a KPI entail? Each key performance indicator needs to include the following elements:

  • A Measure: Every KPI must have a measure. The best ones have more specific or expressive measures.
  • A Target:Every KPI needs to have a target that matches your measure and the period of your goal. These are generally a numeric value you’re seeking to achieve.
  • A Data Source:Each of these needs to have a clearly defined data source.
  • Reporting Frequency:Different measures may have different reporting needs, but a good rule to follow is to report on them at least monthly.
  • Owner:Setting expectations of who will take care of tracking, reporting, and refining specific KPIs is helpful to your overall organizational plan.

 

Let’s look at a few examples that apply the five elements to a couple of industries:

 

(Pro tip: Monthly, Quarterly or Annually are recommended timeframes because the length of time is long enough to have consistent reporting. Shorter timeframes may not provide a full picture of performance.)

Which KPIs should your business track? Remember, you can’t manage what you don’t measure!

Every department in your business can benefit from setting KPIs. Marketing, sales, human resources, operations, accounting – the KPIs are going to vary widely but the goal of company-wide improvement and forward momentum as a result of collaborative effort should be shared across the board.

Stay tuned to the SAS blog to learn more in the coming weeks about KPIs and how to best use them in your business. And, don’t forget SAS can help you set key performance indicators, track, measure, and report as an accounting partner that truly goes beyond taxes and compliance. We’re so much more and we’re here to help!