12 Examples of KPIs for Running Your Business

Examples of KPIs

We recently launched our new KPI tracking feature in Cascade, and since then we’ve been flooded with requests from people asking for examples of KPIs to help them build out their own. Over the next few weeks, we’ll be writing a series of guides containing examples of KPIs for each of the teams in your business.

 

For each KPI, we’ve provided a brief description of why you might want to use it. We recommend that you create at least 2 KPIs for each of your strategic focus areas. Check out the full list of teams for which we’ll be providing examples of KPIs:

  1. KPIs for Finance Teams (this guide)
  2. KPIs for Sales Teams
  3. KPIs for Marketing Teams
  4. KPIs for HR Teams
  5. KPIs For Customer Service Teams
  6. KPIs for Health & Safety Teams
  7. KPIs for IT Teams

Check back regularly, or subscribe to our e-mail list to be the first to hear when your team goes live in the mini-series.

BONUS: We’ve prepared a free downloadable KPI cheat sheet for you to take away and keep forever.

Download Financial KPI Cheat Sheet

Grab our cheat sheet of the 12 best examples of financial KPIs. That way you’ll always have it on-hand when you’re ready to build out KPIs for your own business.
Examples of KPIs for Sales Teams

We’ve decided to kick things off with some of the most important examples of KPIs for running your business – those that relate to your financial performance. Whether you have a dedicated finance team or not, these examples of KPIs for finance teams are critical to measuring the success of your business.

Examples of KPIs for Finance Teams

Understanding your profitability

These examples of KPIs are for helping you to understand how well your business is performing in terms of profitability. This can help you to benchmark both internally and externally as well as help you to set growth targets over time.

Gross Profit Margin
Expresses your profits as a percentage of total sales revenues generated. This gives you a high level view of how much profit you’re making, although it doesn’t factor in all expenses so shouldn’t be used for detailed decision making. It is however useful for bench-marking your performance over time, or comparing your profitability to another similar company.
See ExampleSetup in Cascade

Net Profit Margin
Is the percentage of revenue remaining after all operating expenses, interest and taxes have been deducted from a company’s total revenue. This gives a more accurate internal figure for understanding profit, but is less useful for comparisons outside of your company.
See ExampleSetup in Cascade

Monthly Recurring Revenue (MRR)
A popular metric for SaaS companies such as ourselves – this metric looks only at the revenue you generate each month which will re-occur with little to no additional investment required. For example any customer who signs up to a recurring monthly subscription to Cascade increases our MRR.
See ExampleSetup in Cascade

Return on Equity (ROE)
Measures your net income against each unit of shareholder equity. Return on equity ratio not only provides a measure of your organization’s profitability, but also its efficiency. Less useful for startups, but an important KPI for established organizations.
See ExampleSetup in Cascade

Understanding your liquidity

Being profitable is key, but if you’re not able to pay your debts or stay liquid, you won’t be around for long. These examples of finance KPIs will help do that.

Current Ratio
The Current Ratio KPI weights your assets, such as accounts receivables, against your current liabilities, including accounts payable, to help you understand the solvency of your business.
See ExampleSetup in Cascade

Working Capital Ratio
This is calculated by subtracting current liabilities from current assets. Assets include things like cash on-hand, short-term investments, and accounts receivables. Liabilities includes things like loans, accounts payable, and accrued expenses. It gives you a nice picture of your company’s health by evaluating available assets which can be used to meet short-term financial liabilities.
See ExampleSetup in Cascade

Accounts Receivable Turnover
Shows you the rate at which you are collecting what is owed to you by customers. Calculate the KPI by taking total earnings in a given time period against your average accounts receivable in the same period of time. It’s best to monitor this over time so that you can use it as an early warning system for your customers starting to take longer and longer to pay you – if this happens, it will impact your own liquidity soon enough.
See ExampleSetup in Cascade

Runway & Burn Rate
These two simple KPIs work conjointly to help you understand how much time you have for survival in the worst case example of sales stopping completely. Simply calculate how much money you’re are spending each month – this is your burn rate, then divide the total amount of cash you have available by this figure, to give you your runway in months.
See ExampleSetup in Cascade

Understanding your efficiency

If you’re profitable and liquid, you’ve already passed some of the hardest tests in business. Now it’s time to start measuring your efficiency as a business and trying to find opportunities to improve, which in turn will improve your profitability and overall stability.

Revenue per FTE
With employee costs usually making up the bulk of a company’s expenses, it’s often useful to measure how much revenue you are actually generating for each employee in your company. This gives you an idea of whether or not you’re making an appropriate amount of revenue for the size of your business.
See ExampleSetup in Cascade

Revenue per Customer
This gives you an idea of how much gross revenue you make per customer. How you calculate this will vary depending on the type of business. For us as a SaaS business, we look at the Life Time Value of a customer (LTV) based on what they pay in their subscription and how long a subscription typically lasts. If you were coffee shop you might instead look at the average spend in a visit.
See ExampleSetup in Cascade

Revenue Growth Rate
This KPI helps to ensure your business continues to grow at a target rate, measured by a percentage. Ideally you would measure this monthly or on a 12 month rolling average basis.
See ExampleSetup in Cascade

Cash Conversion Cycle
Measures the time it takes to convert an investment in inventory or some other resource input into cash. This gives you an understanding of how long cash is tied up in inventory before the inventory is sold and cash is collected from customers.
See ExampleSetup in Cascade

Asset Turnover Ratio
Measures a company’s ability to generate sales from its assets by comparing net sales with average total assets. For example, a ratio of .5 would mean that each dollar of assets generates 50 cents of sales.
See ExampleSetup in Cascade

Hopefully you’ve found our examples of KPIs for finance teams useful! Next up, we’ll be taking a look at KPIs for sales teams. If you’re looking for a platform to help you create and track KPIs for your business, then look no further than our strategy execution platform Cascade!

Download Financial KPI Cheat Sheet

Grab our cheat sheet of the 12 best examples of financial KPIs. That way you’ll always have it on-hand when you’re ready to build out KPIs for your own business.
Examples of KPIs for Sales Teams

Now’s the perfect time to explore whether strategy execution software is right for you. Cascade is easy to use, incredibly powerful and trusted by some of the largest (and smallest) brands in the world. Pricing starts at $21 per month.

(there’s no credit card required (if you already have an account, log in here))

2018-04-16T12:20:21+00:00