Management Information and Key Performance Indicators
If you’re running a business you need the right information at your fingertips to help you make the right choices. Since the banks started to get tougher on lending you’ll certainly need to be supplying them with up to date management information on your cash flow and profitability.
If your current accountancy firm doesn’t help you produce critical management information and advise you on which key performance indicators to monitor ask them to. If they can’t we can help.
Understanding your current profitability and future cash flow requirements is a crucial requirement for informed decision making. Regular monthly or quarterly information will allow you to
- Know what cash you need before it is too late
- Put you in control of business finances
- Provide targets so everyone knows what they are trying to achieve
- Create a professional relationship with your bankers so they will lend you money if needed
- Put you in control and let you sleep at night
What is typical management information?
Relevant management information and the associated Key Performance Indicators (KPIs) vary from industry to industry, however the following list is relevant to most businesses:
- Monthly cash flow forecast for 12 months.
- Forecast updated for actual results to date
- Profit & Loss, Balance Sheet, Cash Used Summary
- Variances from forecasts with reasons
- Key Performance Indicators including gross margin, interest cover, net gearing, debtor days, creditor days, stock turnover days.
Business is hard enough without being at an unnecessary disadvantage through lack of relevant information to inform your decisions. Having the right management information will make it easier for you to make difficult decisions and monitor results.
To see how we can help call 0121 764 5161.