Do you know the strength of your business on any given day? How do you know? If you haven’t identified your business’s KPI’s, maybe now is a good time to do that.
Key Performance Indicators, or KPI’s, are data values that indicate your company’s condition. Whether you are measuring overall financial condition or specific processes, KPI’s tell you how well you are doing.
Think of it as the gas or oil gage on a car. If they’re at zero, then you quickly know you will not be going anywhere. Also, to get where you need to go, you can forecast the amount you need based on past history.
As an installation or fabrication company, what KPI’s should you be tracking for your business? Here are a few to consider:
- Number of orders/jobs received today, with comparison to month and year to-date
- Total cash, payables, and receivables
- Inventory value
- Invoices processed
- Rework orders issued
- Average days to complete an order/job
You might come up with other values that would indicate the condition of the company, but these are some examples to get you started.
Some of your KPI’s may change from time to time based on what you are measuring. For example, if credit memos are a problem, a KPI may show credits processed each day based on a reason code and showing a trend line.
Traditionally, KPI’s are posted on a dashboard you see on your computer when you access the system; however, having them emailed to you at a particular time is also very effective.
Define the KPI’s important to you and have your system generate them for you!