KPIs, or Key Performance Indicators, help you measure how your accounting firm is performing in different areas, like client satisfaction or marketing. In business, the goal is always to grow and improve your company. Unfortunately, you can’t do that unless you have defined perimeters for what growth means to you.
That’s where your KPIs come in. To help you get started measuring success, here are some of the main KPIs you can track at your firm to improve financial results, productivity, client profitability, marketing and lead analysis, and client retention.
One of the most critical types of KPIs you can track is financial indicators. The most surefire way to know if your business is a success is by asking yourself “Am I making money?” So, financial KPIs you can track are profit and loss, the costs of your processes and tech, the number of invoicing disputes, and operational costs per collection.
Your firm includes a lot of moving parts. Just as you want to know how your company is performing, your team needs to know how they’re doing. Your staff may be working harder when they could be working smarter. How many days does it take to complete the monthly close? Annual close? How many errors can be detected in employee work? How much time is taken for each task? These KPIs can help you identify problems in your team’s processes and find solutions.
Not all clients are created equal, and assessing your current client pool for profitability is a great way to discover if it’s time to cut ties with anyone. You can also use profitability KPIs if you are trying to decide the direction or niche of your firm. If you have a lot of clients in one industry, and that’s where you’re making the bulk of your profits, it might be time to develop a niche. Good KPIs to track in this are net profit, gross profit, and income per project.
Marketing & Lead Analysis
How are you getting new clients? How much value do new clients bring on average? These are questions that lead analysis and marketing KPIs can answer. In general, you should be tracking how many people are visiting your website, how many people are engaging with you on social media, web conversions, how many clients come from referrals, and how many potential clients become actual clients.
Keeping your clients happy is essential for business, which is why client retention and satisfaction KPIs are also vital. Client retention rates, ratings and reviews of your firm, and how many client referrals you’re receiving are all KPIs you might track to ascertain your success in this area.
As an accounting professional, you know just how significant the numbers are. When you name your objectives and collect tangible data, you can take the guesswork out of scaling your business. Let us know down below what new KPIs you’ve been keeping track of — and if you’ve seen results through tracking any of the KPIs we’ve mentioned!