Are you using the right metrics to measure your company success?
Key Performance Indicator – Resources & Outputs
A company’s resources include: their people, their plant and equipment and the hours available for production. In a well-financed business, resources also include cash and working capital. Ask yourself, what are your unit outputs or sales from your employed resources?
- Physical units produced/sold
- Purchased units resold
- Machine hours sold
- Project hours sold
- Information reports sold
- Customer Acquisitions
- Other defined unit outputs
Have you defined all of your resources and outputs? Do you understand how to measure the performance of each resource with its related outputs? Are you actually doing this—or just occasionally giving the idea a passing thought?
Think in terms of units for the outputs. What is your client/customer acquisition cost? Have you calculated dollars per unit produced/sold and the unit cost for COGS, overhead and margins? Do you understand how to interpret these results?
If you are doing this kind of analysis and tracking the trends, do you believe the veracity of the results—or is there some doubt?
Many businesses produce some very good financial results, but have not mastered the art of measuring how productive their resources are, and the trend over time.
CFO-Pro specializes in defining and measuring performance indicators, and enhancing your understanding of how these indicators can affect your financial results.
This is not typically a costly exercise since all the information needed is available. It just needs to be surfaced and inter-connected to provide some very valuable trending insights.
Please feel free to call or email me to discuss your situation.