Key performance indicators are fundamental for measuring performance and accountants can help with creating and measuring them
Key Performance Drivers
Accountants Can Help Key Performance Drivers are fundamental measuring performance determining which metric are driving companies forward
Key performance indicators are fundamental for measuring performance and accountants can help with creating and measuring them. But which metrics are driving companies forward?
Accountants Can Help Key Performance Drivers that have long been a fundamental tool for a company’s management and accountants to measure performance. KPIs focus management’s attention on a finite array of statistics that are indicative of a company’s performance, and are believed to have explanatory power over the company’s desired financial results, such as profitability.
Accountants note that Key Performance Drivers have significant weaknesses, however. KPIs are backward-looking. When your KPIs are where you want them to be, everything is great. When the KPIs fall short of expectations or goals, there are problems to be addressed. There is, necessarily, an information lag between firm activities and most KPI reports.
Accountants Can Help Key Performance Drivers are powerful in that they help to address information overload. Any manager or accountants has more information available, or even thrown at them, then they can process in a timely and coherent manner. KPIs allow us to wrestle the fire hose to the ground and point it to where the fire is — or at least in its general direction.
Because Accountants Can Help Key Performance Drivers are generally quantified (or at least quantifiable), they provide an objective tool for measuring the performance of a business at all levels, from the enterprise level to the business unit, team, department, accountants, and the individual employee. KPIs serve as the basis for reporting performance, providing feedback on performance, prompting a discussion over what changes, if any, need to be made to the relevant business processes or assets devoted to them, and then implementing those changes. KPIs are often used for goal setting and compensation is frequently connected to them as well.