Gilbert & Associates

What are the Three Most Important Financial Metrics you Track in your Business?

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Many of us have a good handle on where our business stands financially. But sometimes the many different numbers are more confusing than they are helpful. Some metrics can really waste our time when trying to create a true snapshot of your business financials. So to help you keep clear focus while analyzing your business, we’ve narrowed it down to three main metrics you need insight into no matter what:

1)      Sales or Closed Business:

Definition– Complete view of total sales and closed business.

Questions to ask yourself– What will your future revenue be based on what you sold today? What are your projected sales over the next year, 2 years? How many quotes are closed, and what is the ratio?

2)      Cash Flow:

Definition– The movement of cash into or out of your business, project, or financial product.

Questions to ask yourself– How much cash do you have to survive X months?

3)      Gross Profit Margin

Definition– The difference between the sales and the production costs excluding overhead, payroll, taxation, and interest payments. (GPM may be the most important. For example, your sales may be trending up, but if your gross profit is trending down, your cash will dry up.

Questions to ask yourself– What is your cost of sales and how much do you have left to cover overhead and desired profit?

Keeping a close tab on these metrics daily will ensure you stay in tune with your business needs. It will also allow you to stay competitive, which is a key factor to business success in today’s market. We here at Gilbert & Associates are certified in Microsoft Dynamics® NAV implementation, training and support with specialties in Manufacturing, Wholesale Distribution, and Financial Management.  With Microsoft Dynamics NAV’s in-depth financial insight capabilities, management of key financial metrics is a breeze. Contact us for more information.

By Gilbert & Associates, a Seattle Microsoft Dynamics NAV Partner

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