5 Financial Levers to Increase Cash and Profits in Your Growth Stage Business

As a growth-stage entrepreneur, you’re constantly thinking about ways to increase cash and profits in your Company. The more profitable you are, the more cash you can invest in people and strategies to support your growth.

Sounds simple, right? 

At New Economy, we’ve used some of these tactics ourselves to grow our revenue from $0 to $2M with a gross profit margin of 50% and net profit of 15%. 

And we want to help you gain control of your finances to make smart decisions to build and grow your Company. 

In this article, you will learn about: 

  1. 7 key financial levers to increase cash and profits and the impact
  2. Top 3 takeaways 

Let’s dive in.

What are the 5 Key Financial Drivers to Increase Cash and Profits?

First off, every business is unique and things vary from industry to industry. However, we believe that there are 5 drivers that each business should focus on.

Here they are:

1. The first driver is Price. Certainly, we all know what price is defined as. It is what we are charging our customers for our goods and services. 

At New Economy, we are being innovative on the pricing front. For instance, we are focused on what we call value-based pricing. We are not thinking about rate and time but more about the value we are producing for our customers. This requires a deep understanding of the customer’s needs, wants, challenges, and goals. From there the goal is to add value to help them meet their goals, remove obstacles, and provide for needs and wants. 

For example, as it relates to achieving goals, it might take us 15 minutes to come up with a solution that will save a customer $50,000 which increases their net profit. We believe the value of that is worth much more than the time that we put into it. So if priced hourly, we would price the service out at $37.50 (15 min x $150) versus pricing it out based on the value, which would be more of an art and say $2,500. Would you pay $2,500 to save $50,000? I know I would.

Here are a few quick questions for you relating to price. 

  • Do you have a process for increasing your prices? 
  • When was the last time you increased your price?  
  • How are you determining your price? 
  • Is your price truly representative of the value you are adding to the marketplace?

2. The second driver is Volume. This is the number of units, services, or hours that you are providing to your customers. Getting back to knowing your customer, is there an opportunity to continue to support their group by adding more of what you do?

We have a customer that installs accessibility equipment in people’s homes to help them age in place safely – a noble mission. They have a contract in place with Veterans Affairs (VA) in several states. Through understanding some of the VA’s challenges, they learned that the VA had veterans from other states in need. The customer then helped to support the VA and its veterans by expanding its geographical footprint. This ultimately led to installing more units, thus increasing the volume which drove up revenue. And as we know, increasing revenue can increase profitability.

More questions for you.  

  • Can you increase the number of units, services, or hours you are selling to existing customers, and how? 
  • Can you offer a different service to your existing customers that will add value in a new way? 
  • Can you enter into new geographic markets and offer value to new customers?

3. The next driver is Direct Costs or Cost of Goods sold. These are the costs that are directly related to producing your revenue. They are your raw materials or your direct labor. These costs are variable with revenue so if revenue goes up then these costs will typically increase as well. But is there a way to decrease them?

Here are a few thoughts on reducing COGS to increase profitability:

  1. Stop making products that don’t sell. There are carrying costs such as warehousing, insurance, and transportation that are tied to this. Get rid of old inventory and stop making it all together.
  2. Negotiate with everyone. Work with your suppliers and look for volume and payment discounts. Also, periodically shop around for other suppliers that might be able to deliver the same value but at a lower cost.
  3. Automate your processes. Maybe you can use a just-in-time inventory system. Or maybe you can create efficiencies by reviewing your purchasing process which will add to cost savings.

The things to consider here are…

  • How you can drive these costs down while still being able to deliver value to your customer? 
  • When was the last time you took advantage of pricing or volume discounts? 
  • When was the last time you negotiated on your pricing?

4.  The next driver is Operating expenses. These are overhead-type costs like rent, insurance, general and administrative costs, software costs, and general salaries and benefits.

This is an area where we have a bit more control than we think. See if revenue is down, there is still a way to hit your net profit percentage by understanding which expenses are necessary to achieve your goals and reducing those that might not be.

Over the past few years, businesses have been challenged in many ways with Covid, supply chain issues, and even finding good help. Further, on the customer side, folks have been much more cautious about spending due to the recession.

We have a customer that provides software directly to consumers in the form of subscriptions. Due to the market downturn, the customer was not hitting their revenue projections. However, they knew that their operating expenses should be 30% of their revenue (they have a budget), so they reviewed their operating expenses, and here is what they did.

  1. They ran a few different scenarios to determine the budgeted profitability by reducing overall operating expenses by 5%, 10%, and 15%. They determine that a 10% cut in operating expenses would still allow them to achieve their budgeted profit of 15%
  2. They went line item by line item through their operating expenses and asked the question, does this expense get us closer to achieving our goals? 
  3. They were able to side with which operating expenses to reduce or completely cut out of their revised budget and started managing against it.

By managing, reducing, and cutting out unnecessary operating expenses, you can achieve your profitability goals even without increasing revenue.

5. The final drivers relate to balance sheet items. Here we are focused on increasing the speed at which we collect on Accounts Receivable and decreasing the speed at which we pay vendors on Accounts Payable. Or possibly even increase the speed at which we pay vendors to take advantage of early payment discounts. 

These two levers are pretty straightforward and are pulled by your accountant. Here are some thoughts about increasing cash flow by pulling on these levers:

  1. Utilize a 13-week rolling cash flow forecast for visibility and decision-making (see NE Blog on this)
  2. Set goals and measure them weekly on AR collections; Have your accountant take ownership of them
  3. Review all of your vendors and see if they offer any early payment discounts that you can take advantage of

We have several customers that have leveraged our 13-week rolling cash flow forecast. This has provided tremendous opportunity and visibility into finding ways to accelerate cash flows.

3 Key Takeaways Related to Increasing Your Cash Flow and Profitability

If you want to build and grow your business, you need to make sure you are focusing on its data components. This will provide assurance that you are maximizing your profits, ultimately increasing your cash flow.

Here are three key takeaways:

  1. Make sure you have someone get into the weeds and understand the impact of the above-mentioned levers. In fact, we suggest completely delegating ownership of this to a capable person like a fractional controller. Functions like this will be in their sweet spot and they can take ownership of helping you to move the needle here (Refer to our blog on fractional controllers).
  2. Expect a positive return on implementing these exercises. We believe that expectations should be created and then you should drive toward those results. We suggest recalibrating your weekly scorecard with new goals and aligning your work to produce the results. Further, consider updating your financial projections based on the revised goals and the levers you are pulling (refer to our blog on financial projections).
  3. Lastly, start slow and go deep. Select one of these areas and have your team spend 90 days working on it. Take the time to see if your revised goals are accurate and if not, understand why. Once you have mastered one of the techniques and achieved the results you are looking for, only then move on to the next lever.

New Economy Team Members are Experts in Accounting for Entrepreneurs

If identifying ways to increase your cash or profitability is not in your skill set or you want to gain control of your finances to make smart decisions to build and grow your business, New Economy is an excellent partner

We’ll help you get your accounting done, and done right.

Schedule a time to meet with our Founder, Jeff, and discuss how we can add value to your situation.

How to Leverage Your Accounting Team to Reach Your 2023 Goals

As an entrepreneur, you understand the importance of accounting and its impact on your business. It plays just as essential a role as operations, sales, and marketing, so it’s imperative you build an accounting team that will carry out tasks with your business goals in mind.

A strong accounting department  is comprised of people, systems and processes, and technology. The department comes together to provide accurate data that work together to reach your goals. 

As 2023 gets underway, it’s the perfect opportunity to work through how you can leverage your accounting team to get your business to where you hope it will be at year-end

Build the Right Accounting Team

We touched on the basics of a strong accounting team, 

  • Great people
  • Great systems and processes
  • Great technology 

But let’s go into a bit more detail. 

Create an Accounting Structure that Works for Your Needs and Size 

Understanding your accounting needs is the first step in building a strong accounting team. A good place to start is an organizational chart

  • Who is in charge of what and how much work can they realistically be responsible for? 
  • What areas can be outsourced? What needs to stay in-house? 

Map it out to get a good idea of your business’s needs. 

Find Team Members that Align with Your Value System

It takes the right people to build the right team. Your values are an important piece to your business and anyone joining your team should agree with and align with those values. 

Before bringing them on, ask yourself if you can see them demonstrating your values through their work and working well alongside your current team.

At New Economy, we function as Partners to you and your business so are looking for a high degree of alignment.

Find Team Members that can Perform the Core Functions Needed

To no surprise, a knowledgeable team member is an essential part of an accounting team. 

Go back to your organizational chart and make sure you’re bringing on team members who know how to perform the core functions needed and are willing to learn any areas they may not be as well-versed. 

You want to make sure your team members are challenged and working in their area of unique ability. Further, you want to make sure that you are not overpaying and compensating for what you need provided by the person that is the right skill level fit.

Again, it’s all about the people and the right fit.

Leverage Technology that is Effective 

Consider technology as an integral part of your accounting team. It helps complete tasks you’d otherwise be managing manually, so selecting the right tech stack is essential. 

Wherever possible, aim for automation and simplification.

We try to build processes that are scalable, repeatable and support the production of timely and accurate data.

Your Accounting Team Will Produce Key Insights 

Once the structure, people, processes, and technology are established, it’s time to let your accounting team start creating key insights that will help you run your business. 

Your accounting team should develop a system to produce: 

  • Weekly financial scorecards 
    • These measure what’s on track and what’s off track on a weekly basis.
  • Month-end financials
    • These measure what’s on track and what’s off track on a monthly basis.
  • Weekly cash flow projections
    • These will help you spot gaps and trends.
  • Monthly Financial Projections
    • These give you an outlook for the month and allow you to forecast results.

Check out our blog “Top 4 Financial Tools for Success” for more information about the key insights your accounting team will need to produce.

Two Factors to Consider

As your accounting team starts producing these key insights and other important information, you need to keep in mind two factors: 

  • Timeliness of the information
  • Accuracy of the information 

Timeliness is essential for making real-time decisions and ensuring your business is always heading in the right direction. 

Accuracy leads to reliability. You have to be able to trust your information is correct so that you can make informed decisions. 

Bringing it all Together

Following the strategy above will ensure you are building a strong team that produces results and draws you closer to your 2023 goals. 

A team built with this framework in mind will help you: 

  • Gain control of your finances
    • There will be no more guesswork. Everything you need to know about your business’s finances will be at your fingertips so you can make the right moves going forward. 
  • Make better decisions based on data 
    • They’ll produce timely, accurate data which is key to helping you make decisions that align with your business goals. 
  • Ensure your business is on track with your goals
    • You have to measure your progress toward your goals weekly, monthly, and quarterly to ensure you’re on the right track. This gives you ample opportunity to strategize a new plan of action if you’ve fallen off course. 
  • Provide visibility into business issues 
    • As your business grows, issues can arise and create major problems for your business financially. Your team will be able to catch these issues with plenty of time to make adjustments.

While an in-house accounting team may be the right move for some businesses, outsourcing is also an invaluable option. Working with an outsourced accounting team like New Economy gives you all of the above benefits at a fraction of the cost.

In fact, our mission is to help entrepreneurs gain control of their finances to make smart decisions to build and grow their business.Contact us today if you are interested in learning more about how New Economy can serve as your accounting team!

10 Things We are Grateful for as We Approach Christmas

Besides accountants, New Economy is made up of a team of deep thinkers and meditators. We are always looking ahead, however, we are also a reflective bunch who loves to take a step back and see our progress. 

During our reflection periods, we tend to run into a common theme: there is no way New Economy would be what it is without the help, support, and guidance of others.

So as we look back over 2022, we want to share with you a few of the things we are thankful for this year:

Our 10 Points of Gratitude

1. Our Talented Team

Our very talented, committed, and aligned team and the families that support them keep our firm moving forward. 

YOU are New Economy and we wouldn’t be where we are today without you! Gratitude is an understatement when it comes to you.

2. Our Courageous Clients 🚀

Our passionate, risk-taking, courageous clients and the families that support them inspire us every day. We, quite literally, wouldn’t be where we are without you. 

You make us better and we are so thankful you give us the chance to serve you!

3. Our Team of Consultants ❤️

Our team of consultants are talented, flexible and hard charging. You drive us to be better. 

You are truly a part of our family, we appreciate you more than you know.

4. Our Mobile Office aka The ‘86 Camper Van 🤙

VW deserves plenty of thanks for making the ’86 camper van that serves as our mobile office. 

We are thankful for the opportunity to work on the go. On mobile office days we get lots of work done and catch plenty of waves in the process. 

5. The EOS System

The EOS system that has helped us to define vision, goals and make it all come alive. This system has done wonders for New Economy and is a staple in our business. 

Gino Wickman, we owe you a coffee.

6. Our Expert Partners

Our expert partners that support our business on the technology, marketing, insurance, banking and sales side. You help us do the tough work in the background so that we can focus on growing our business.

You know who you are, you have been by our side…thank you for all of your hard work.

7. Solid Internet Connections

Solid internet connections that allow our team to deliver amazing service in a fully remote capacity. This helps our business model thrive. 

Thanks Verizon.

8. Mentors, Business Coaches, and Sheepdogs

Mentors, business coaches and sheepdogs that have guided and supported us and kept us on the right path. You all continuously point us in the right direction. 

You know who you are, you have shaped us. Thank you.

9. Former Team Members and Clients

We can’t forget our former team members and clients that have played a role in our story. You know who you are, and your significance can’t be understated. 

Much love to you.

10. Co-Working Space

Co-working space that has supported us when we needed to get together in the same room. We love our remote-work style but every once in a while, it’s good to meet in person. 

District Hall, the coffee, connection and wifi was amazing!

From the Bottom of Our Hearts, Thank You

The phrase “it takes a village to raise a child” originates from an African proverb and conveys the message that it takes many people (“the village”) to provide a safe, healthy environment for children, where children are given the security they need to develop and flourish, and to be able to realize their hopes and dreams.

Well, we agree and we feel that way about growing and building New Economy. As you can see, it takes so many people working together to build a successful business. 

So from the bottom of our hearts, thank you. Thank you to every single person who has played a role in making New Economy what it is today. 

We have plenty to be grateful for this Christmas season, but now we want to bounce back to you and ask, what are you grateful for?

We encourage you to take a few moments and meditate on this question. And please, let us know your answer!

Master Your Year-End Planning

Believe it or not, it’s time to add year-end planning to your to-do list! It’s finally time to start preparing for the year ahead so you can position your business for success.

At New Economy, we’ve also started this process, here’s a look at what it looks like for us.

As year-end approaches, we think about three things: 

First, we look back. We reflect on how we did against our plan from last year. Did we achieve our goals? Did we hit our budget? What did we learn? This information gives us a great starting point. 

Second, we pick our heads up. We try to think big picture about:

  • Where the team is at,  how our culture is doing and new seats we need to fill
  •  What processes need to be improved or evolved
  • Where the industry is at and general market conditions

Are there any opportunities or risks? What is impacting the business? 

Lastly, we look forward. We apply all of the information we have learned and with it, we think about the year ahead. We start to create visions and goals for the new year ahead.

Mastering year-end planning means pulling these three thoughts together. At New Economy, we do this by following a few key processes and then implementing these same steps into our client’s planning processes based on our reflection. 

Let’s take a closer look. 

Strategic Planning 

Strategic planning is one of the best ways to ensure the upcoming year goes smoothly. Because we can’t plan down to detail what the year is going to look like, it’s important we do what we can now to have a strong idea of what’s to come. 

It works by us hosting a series of strategic planning meetings with the goal of setting a plan for the new year. As we build our one-year plan, here are some things we will consider: 

  • What issues and problems do we have and how do we solve them? 
  • What opportunities are in front of us?
  • What are the top three to five goals we want to accomplish as a company? 
  • What are the top three priorities for Quarter One? 

At New Economy, we like to build this one-year plan by keeping an eye on our three-year plan. Doing this ensures that what we are working towards now, aligns with what we hope to achieve later down the road. 

Budget Planning

Along with our strategic plan,  we also need to put together a budget. 

You likely already understand the importance of building a budget, but you also need to recognize that your budget and strategic plan go together hand in hand. In fact, your budget actually supports your strategic plan and ensures your spending reflects the goals of your company. 

As we build our 12-month budget, we will cover the following: 

  • What is our hiring plan by month? 
    • We’ll ensure our hiring plan also supports our growth plan. 
  • Where do we need to invest in the business? 
    • Whether it’s marketing, training, or technology, we’ll be sure to include these investments in our budget. 
  • What is our client onboarding plan/process in the new year? 
    • We’ll ensure this lines up with our current capacity and hiring plan. 

We ask all of these questions (and more) in an effort to prepare a detailed monthly budget for the next 12 months that supports the strategy of the company. 

Year-End Tax Planning

Another area we focus on at year-end is tax planning. At this point in the year, we have a pretty good sense of where the numbers will land. 

To the extent there is profit, it’s important we spend some time minimizing the taxes we pay, because after all, who doesn’t love saving a bit of money? 

To do this, we will focus on these areas: 

  • Are there any investments such as equipment or technology needed in the business? 
    • If so, we will factor these expenditures in because they can reduce taxable income. 
  • Are we maximizing the benefits of a retirement plan? 
    • The Company can make a match on behalf of employees which is a deductible expense.
  • Are we rewarding employees appropriately based on the financial results of the business? 
    • Paying a year-end bonus is a deductible expense and great for culture, especially during the holiday season.

Again, answering these questions (and more) will help guide our tax planning for the remainder of this year and the year ahead. 

Partner With New Economy to Master Your Year-End Planning

As you can see, at New Economy, we’ve built a solid year-end planning process that focuses on crafting a strategic plan, building a budget that supports that strategic plan, and pulling together a tax plan that drives savings. 

Each of these processes helps us to gain control of our finances to make smart decisions to build and grow our business. 

Since this year-end planning strategy has worked so well for us, we also apply the same processes to our client’s companies in an effort to help them reach their business goals as well. Reach out to us today to learn how we can help unleash your full potential!

Is My Business Worthy Of Investment?

As a business owner, it’s likely you believe your business is worthy of investment. You work hard to make it successful day in and day out. 

As you consider your options to grow your business, the thought of adding third-party investors may have crossed your mind. However, not every business is a good candidate to add investors, and not every business is really in a position to bring in third parties.

So, how do you know if your business is in a position to receive investments and attract investors? Ultimately, investors are interested in stability and opportunity. However, every investor evaluates these two factors slightly differently. Their individual review of your company from several angles will determine whether it is appropriate for them to invest.

If you want to attract investors, you need to evaluate your business’s worth as an outsider looking in and be willing to make adjustments to make your business more appealing as an investment opportunity.

Evaluating if Your Business is Worthy of Investment

The value of your business from your perspective may be very different compared to a true valuation of the company. While your blood, sweat, and tears may have gone into the business to get it off the ground, an investor is going to want to see hard numbers and information before they invest. Your financial information and opportunities for growth will be huge factors to consider when valuing your company.

Financial Measures

Investors will want to take a hard look at various financial information before deciding to invest. Examples of this information might include:

  • Balance sheets
  • Income statements
  • Cash flow statements
  • Sales margins
  • Debt to equity ratios

Ideally, the numbers reflected in these documents will show stability or growth. Some investors are more interested in a stable company or one that has growth opportunities, even if you do not show growth from year to year. Avoiding decline is critical to attracting investors.

These financial statements also show investors that you have a strong foundation and solid internal structures. Some small businesses make the mistake of not preparing these financial documents. However, if you are not tracking or cannot create these documents with your data, investors will see that as a red flag.

Market Comparison

Many investors will also review your company compared to other businesses in your industry. Those businesses may or may not be in your geographic area, depending on the type of business you have. This comparison includes financial information, but it goes beyond the books and records as well.

For example, many investors are interested in investing in a company that stands out from the competition. If your company is just like every other business in your industry, an investor might not see any real value in investing with you.

In addition to uniqueness, investors will also be interested in how you appeal to customers. Ideally, the market position should be strong because of your pricing and customer appeal. If either of these factors is struggling, that can be a turn-off for investors.

Growth Potential

If you are in a position to grow, investors are going to be more interested in helping you do that. They want to ensure that the money they invest will get a return, and solid growth is the best way to ensure ROI.

Growth does not necessarily mean that you must add a new product line or start offering a new service. Instead, you can focus on ensuring that your team structure can foster and sustain growth. Are you giving your team all the tools they need to succeed?

You should also be able to provide investors information about growth goals—which means you need to have hard growth goals set in place. For example, when will you reach your growth goals? Do you need an investment to reach those goals

Creating a Business Worthy of Investment

Increasing the value of your business is certainly possible, but you need to get started right away. When you focus on worth and value, you often set yourself up well for reaching long-term goals, but these changes can take a significant amount of time—so you should start right away.

You can make small adjustments to your cash flow and overall financial strategy to create more financial appeal. Improving your budget is a great place to start.

You can also review the market by doing an in-depth market analysis to see how you compare to your competition. A market review will help you decide whether you need to adjust your branding, pricing, or customer service.

Ultimately, every strategy you use in your business should have the goal of sustaining or encouraging financial and operational growth.

Work with an Experienced Accountant

An experienced accountant can help you prepare to attract potential investors. They know what investors are looking for and how to structure a business to be financially promising. 

A CPA, like those at New Economy, will work with you to evaluate the current worth of your company and help you make necessary adjustments to appeal to investors. Learn more about our services by contacting New Economy.

Top 10 Financial Metrics Every CEO or Entrepreneur Needs to Know

As a CEO or entrepreneur, you need to know the ins and outs of your finances. The best way to do that is to track the right financial metrics. 

When you track the right metrics you have all of the information you need to drive success, growth, and reach your business goals. 

Here are the top 10 financial metrics every CEO or Entrepreneur needs to know:

1. Cash Flow

Cash flow is one of, if not the most important metric for any business to track. It is a measure of how, and how much money is moving in and out of your business. Without a strong cash flow, your business could suffer.

A strong cash flow means your business has more money flowing into it than it has going out, so you’ll always want to be improving your cash flow.

You can improve your cash flow by: 

2. Gross and Net Profit Margin

Gross profit margin is a great way to measure the profitability of your core product or service. It measures the profit associated with directly producing revenue.

Net profit margin is a great way to measure your overall business growth. It tells you how much profit you make per dollar of revenue. High profit margins are the goal. 

When your profit margin is increasing, it usually means your business is trending in the right direction. If it is decreasing, that’s a sign to make adjustments to your current practices. 

You can improve your business’s profit margin by: 

  • Increasing sales
  • Cutting costs
  • Or both of the above

3. Customer Acquisition Cost (CAC)

Customer acquisition cost is the average amount of money you spend per new customer. 

Tracking this metric gives you a good idea of how effective your marketing strategy is. Your goal should be to have a low CAC. This would indicate that you spend a small amount to convert potential buyers into customers. 

You can improve your CAC by revamping your marketing strategy to:

  1. Be more effective 
  2. Cost less
  3. Target your ideal customer

4. Growth Rate

It’s likely your goals are centered around growing your business. Using growth rate, you can track your business growth to see if you are hitting or missing your goals. 

One of the benefits of tracking your growth rate is that you can do it with nearly any number. You can measure the growth of profits over “X” amount of time, the growth of specific products over “X” amount of time, or even the growth of a specific division over “X” amount of time. 

With these numbers, you can easily track progress and set realistic, growth-centered goals.

5. Burn Rate

Burn rate measures the amount of time a business has left before it runs out of money. In most cases, the longer the burn rate, the better. 

Tracking your burn rate not only gives you essential insight into how long your business can survive off its current cash but also indicates when a business is spending too much money. If your burn rate is short, it’s time to make a change.

You can lengthen your burn rate time by:

  • Cutting spending
  • Getting additional funding

6. Accounts Receivable Turnover 

Accounts receivable turnover is a measure of how long it takes customers to pay their bills. Because collecting your accounts receivable is how you get your revenue, it’s essential you do it in a timely manner. If not, your cash flow will suffer. 

Ideally, you’d like your customers to pay their invoices the day they are sent, however, everyone in business knows, that’s not always the case. The next best thing is to collect them as soon as possible. The shorter amount of time your invoices go unpaid, the better. 

To shorten your accounts receivable aging time, try:

  • Including a deadline for customers to pay in the invoice
  • Offer a small incentive for paying early

7. Accounts Payable Turnover  

To piggyback on accounts receivable turnover is accounts payable turnover. This is the amount of time it takes your business to pay its bills. Again, the quicker you make your payments, the better. 

Considering your bills and payments are factored into your budget, it’s important you pay them during your predetermined time. Not only does this help for internal reasons but it also gives you a leg-up should you need a loan or go for a credit check. 

8. Budget vs. Actuals 

A budget vs. actuals report is chalked full of important information for your business. It compares your actual spending/expenses to your planned spending/expenses. The goal should be to keep your actuals as close to your budget as possible, if you don’t your cash flow will suffer and it’s likely your burn rate will decrease. 

When you find discrepancies in your actuals to your budget, you can pinpoint where the variance is occurring and make adjustments to get your spending back on track.

9. Customer Satisfaction

Customer satisfaction is a driving force for your business. Whether you focus on it or not, it determines your success. 

There are many ways to gauge customer satisfaction, you could: 

  • Track reviews
  • Send surveys
  • Talk one-on-one with customers

However you decide to measure customer satisfaction, make sure you keep an open mind. Their insight is important and their opinions drive sales. 

10. Employee Satisfaction

Measuring employee satisfaction may not sound like a key financial metric, however, like your customers, they determine your success.

Happier employees result in:

  • Heightened productivity
  • Increased confidence
  • Better relationships with customers

Each of these benefits affects sales, which as you know, drives profits. To improve employee satisfaction, build a work culture that shows you care.

Track the Right Metrics with the Help of an Accountant

The 10 metrics above are a great place to start when measuring the financial health of your business. They provide essential insight into numbers that drive growth and success. 

However, this is not an all-inclusive list, meaning metrics that are important to your business specifically, may not be included. 

To make sure you are tracking the right metrics for your business, recruit a trusted accountant, like New Economy. We will help you select metrics you can use to grow your business. Contact us today to learn more!