For proof, look no further than the proliferation of “7 signs your…” headlines in almost any publication, online or offline. Chances are, there are one or two similar ones in these very pages.
The notion of “statistical appeal”, meanwhile, has long been known by marketers. And accountants are all too aware of how much figures matter to business owners and decision-makers. Even when those figures mean relatively little, everyone wants to see them heading in the right direction.
It’s perhaps surprising, then, that businesses around the globe aren’t using figures to track performance in sufficient depth. A recent survey of Unleashed AU customers found that fewer than 10% were using KPIs to track performance. You can’t grow what you can’t measure, so a large number of businesses are lacking information that’s fundamental to making the right choices.
For advisory accountants, this presents a significant two-fold opportunity. You can give businesses access to insights that help them make better decisions and get closer to their customers. And in doing so, you can prove the value of the cloud apps you’re recommending.
Because “statistical appeal” is especially powerful when dealing in B2B services — enabling you to put the benefits of your service into hard figures, instead of notional benefits and improvements.
Of course, accountants will already be aware of the top-line general KPIs that indicate how a business is performing: revenue growth, total sales orders, margins and more.
Improving these general KPIs is going to show the benefits from your advisory service, but such broad metrics can move according to various factors. To prove that you are adding value, you’ll need more depth in the form of some more specific KPIs. Happily, the cloud apps you’re recommending should provide access to this level of insight.
Unleashed, for example, enables businesses to do much more with the products they sell. We can make your client’s work day-to-day significantly more manageable, and their processes more efficient. Which is all well and good — but becomes much better if you can prove it with some KPIs.
For Unleashed, these might include:
1) Days to sell
Days to sell is a crucial metric for any product-based business, indicating how long a product is sitting in the warehouse before it goes out on a sales order. It’s the fastest way to identify overstocking, which wastes capital — capital which could be spent on marketing, staff or new equipment.
If your client is having inventory issues, then you should be able to reduce their days to sell dramatically with cloud inventory management.
2) Average vs. anticipated lead times
The core of any supply chain lies is in relationships with suppliers. And the most effective way of monitoring and tracking each supplier is through lead times: the average lead time of each supplier, or overall average lead times across all suppliers.
If the app you’re recommending is helping build stronger supplier relationships, then your client should see a reduction in lead times overall — and an increased ability to predict when goods will arrive.
3) Performance by salesperson
Cloud software should empower salespeople. Unleashed, for example, comes with a Sales App to give sales teams access to product data on the road, as well as a B2B Store to eliminate manual data entry on wholesale orders.
But for your client, these tools are only useful if they increase sales without increasing headcount. So to demonstrate that they are, you’ll want to break down the sales orders, revenue and margins generated by each salesperson.
4) Stock allocated to SOs and POs
Like days to sell, these KPIs help keep stock levels as lean as possible — especially if they’re a manufacturer.
Stock allocated to sales orders (SOs) and purchase orders (POs) tell your client what’s marked for sale, and what they’ll need to manufacture next. When combined with the total value of the stock on hand, they indicate how much stock is currently free for sale, and how much is out of use — earning them nothing.
5) Return rate and backorder rate
Inventory software should lower the number of returns from customers, by enabling them to reduce human errors and improve their processes. Lowering the return rate (the percentage of orders that customers send back) will, in turn, boost customer satisfaction, improve margins and reduce losses.
It’s also worth keeping an eye on the backorder rate (the percentage of orders that cannot be delivered on time because the goods aren’t available). If the backorder rate starts to rise, then it’s a sign that your client isn’t keeping enough stock.
Utilising KPIs with clients: 3 tips
- Make accessing data as easy as possible
The key to leveraging data is to make reviewing it simple and straightforward. Cloud apps should make data accessible — make sure that is the case.
- Benchmark, benchmark, benchmark
To show that your advisory service is driving growth across multiple KPIs, you’ll need to ensure that comprehensive benchmarks are in place.
- Always be reviewing
The number of KPIs you can track is mind-boggling. So focusing on getting the right KPIs in front of the right people is imperative, from day one to day 1000.