A cornerstone of a company’s financial health is the success of its budgeting. It’s critical, especially in today’s uncertain marketplace, that an organization’s plans for the future are based on detailed data analytics, taking into account where it has been and where it’s going.
Budgeting is a business’ guide and roadmap for achieving goals. It projects, manages, and provides data intelligence into the revenues and expenses of the organization. Because cash is a critical resource, it must be managed correctly. Understanding your numbers is knowing your business. You must know your business in order to make the best decisions.
A KPI (Key Performance Indicator) is a type of performance measurement used to evaluate the success or failure of a company or activity in which it engages. Often displayed as part of a flash report or dashboard, a KPI allows business owners and decision-makers to get an overview of how their business – or individual department – is performing at any given time. A KPI measures the goals of the organization against the actual, quantifiable data, during a specified period of time. Essentially, KPIs give you visibility into all the moving parts of your business at once.
Understanding your budgeting KPIs will support and influence your business objectives. KPIs are not the goals themselves. They’re the measurement of your goals and targets. Your KPIs will show you how close, or far, you are from reaching those strategic goals. These numbers instantly provide visibility into progress or the reason for not hitting targets. When you’re able to measure your goals this way, it gives you the opportunity to see where you went wrong and immediately pivot as needed to make the best decisions.
You must have a means by which to measure the success, or lack thereof, of your business. Holding employees accountable for results can be difficult. However, if everyone thinks someone else is responsible, then in all reality, no one is truly responsible. Holding people accountable for improving the KPIs which are under their control provides them, and their managers, a yardstick by which to measure their performance. This helps everyone know who is contributing what toward the company’s goals. This sense of continuous improvement allows employees to achieve way more than they might think, which is essential for workplace satisfaction and continued personal growth.
Since KPIs provide an immediate snapshot into the overall performance of your company, this information is a crucial component of how to stay on top of your competition in a highly competitive market. In today’s cutthroat environment, there isn’t room for accidents or luck. Data is the most powerful force by which to base all business decisions. The visibility which KPIs provide, allow you to make systematic shifts all along the way, rather than being forced to make frantic changes at the end of each month, or time period, in order to reach your goals.
To establish meaningful budgeting KPIs, you need to focus on and track these top 13 vital metrics:
It’s critical to have real-time visibility into what is happening within your business, along with the story behind the numbers. The only way to do this is to employ an innovative technology solution which supports automation, provides smart dashboards, and is easy to use without the need of IT. Digitization provides faster metrics, more clear visibility, and streamlines communication. The right technology solution, like Synoptix, does the heavy lifting for you, making it easy for you to quickly, and on-the-fly, make the best decisions for your organization. As a leading innovator of Financial Planning & Analysis software, Synoptix provides for multiple what-if scenarios and depicts the impact throughout the system all the way to the KPI’s. For more information on how you can revolutionize the way you budget, forecast, and plan with instant visibility into the KPIs which matter most, contact the Synoptix team.
