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What numbers should I have on my business scorecard?

What numbers should I have on my business scorecard?

What is a "business scorecard"?

A business scorecard is your company’s financial dashboard. It tracks the key numbers that show how your business is performing.

Instead of guessing or reacting to problems, you get real-time insights on sales, profit, and so much more.

Having up-to date data on all the key numbers in your business on a single piece of paper is vital because it helps you:

  • Make INFORMED DECISIONS that drive growth and boost profitability.
  • Decide WHERE TO SPEND YOUR TIME (& Energy) so that you focus on what matters most.
  • AVOID COSTLY MISTAKES (& highlight opportunities) simply because the metrics show that there is a problem which needs fixing.
  • SLEEP AT NIGHT because you know in real time how your business is performing and if you’re on track or not.

In summary, it’s your guide to smarter business decisions, reduced stress, and more cash in the bank.

What numbers should be on your business scorecard?

Answering this question has two parts.

How many numbers

A good business scorecard should ideally track around 6 numbers.

For you, that number may be slightly higher or lower, especially if you have a team, for example, a marketing manager.

If you think that you need more, that’s fine but try to avoid having more than 10 numbers.

This is because, if you do have more than 10, then your scorecard is going to be cluttered with numbers. A cluttered scorecard with too many numbers makes it harder to focus on what’s truly important.

In essence, you can’t see the wood from trees which defeats the primary objective of having a business scorecard.

So, when choosing your business scorecard numbers you must be VERY CLEAR on which numbers you MUST TRACK because they are critical to your success.

What type of number

When it comes to a business scorecard there are two types of number – input numbers and output numbers:

INPUT numbers
Typically reflect activity which leads to an outcome (i.e. an output)

Examples of input numbers:

  • Amount of marketing spend on pay-per-click ads
  • Number of outbound telephone calls made

 

OUTPUT numbers
The outcome / result of input activities.

Examples of output numbers:

  • Number of new customers
  • Sales conversation rate (percentage of leads who turn into customers)
  • Number of customer complaints

 

When selecting input and output numbers for your scorecard, you should consider all aspects of your business, including sales, marketing, and operations.

A good business scorecard is likely to have a mix of input and output numbers.

Some real-life examples of business scorecard numbers

To give you inspiration when creating your own business scorecard here are the best numbers from five industry sectors.

Retail

  1. Sales per square foot
    Compares sales to floorspace to measure a store’s productivity
  2. Sales per employee
    Measures how productive each employee is
  3. Stock turnover ratio
    Measures how quickly a business sells its stock
  4. Cart abandonment rate
    Measures the % of customers who don’t complete the purchase
  5. Average transaction value
    Measures how much every customer spends on average
  6. Foot traffic (& digital traffic)
    Measures the number of potential customers into store

Marketing (or other service businesses)

  1. Number of leads
    Measures the number of sales leads.
  2. Cost of customer acquisition
    Average marketing cost spent for each new customer
  3. Number of Appointments
    Measures the number of sales appointments.
  4. Number of Proposals Sent : Measures how many proposals were sent to prospective customers
  5. Number of new customers
    Measures the number of new customers.
  6. Average Order Value
    Measures the value of each customer order

Manufacturing

  1. Throughput
    Measures how much a machine can produce over a specified time period
  2. On-time delivery
    Measures the % of products that are delivered to customers on time.
  3. Quality
    Measures the % of products that pass quality checks the first time
  4. Downtime
    Measures the amount of time a machine (or line) is not operating.
  5. Capacity Utilization
    Measures how close a machine is operating compared to its’ capacity
  6. Production attainment
    Measures the % of the time when a production target is achieved.

Hospitality

  1. Table occupancy
    Measures the average number of customers during a given period.
  2. Spend per head
    Measures how much money an average customer spends.
  3. Guests per server
    Measures the productivity/efficiency of each server (or serving team as a whole)
  4. Wage %
    Compares the cost of wages to sales
  5. Food & drink %
    Compares the cost of food, drink & similar costs to sales
  6. Online reviews
    Is an indicator of customer satisfaction

Beauty

  1. Re-book rate
    Measures the % of customers who rebook before leaving the salon.
  2. Spend per head
    Measures how much money an average customer spends in a visit.
  3. New customers
    Measures the number of new customers who come in for treatment
  4. New customer retention
    Measures % of new customers who return within a set period of time.
  5. Salon productivity
    Compares the sales value of treatments done by an employee to their salary.
  6. No-show rate
    Measures the % of customers who fail to show up for their scheduled appointment

Is your business's performance a mystery or are you tracking the key numbers that drive success?

If you’d like a chat to see how we can help drop us an email to [email protected] or call one of the team on 0161 410 0020.

Setting up a great scorecard for your business is a critical piece of the “Score It” step of our Krystal Clear roadmap that we complete with all our growth clients. You can read how Krystal Clear Accounting has impacted just a few of the thriving businesses we’ve helped to grow here, or on Google (we have over 108 reviews!)

Disclaimer

You must take professional advice before making any decisions based on the information that you have learnt here. While every effort has been made, to make sure it is accurate it cannot be precisely tailored to your personal circumstances. This article is for general information only and no action should be taken, or refrained from, as a result of this information.  Professional advice should be taken based on specific circumstances in each individual case.  Whilst we endeavor to ensure that the information contained in the article is correct, no liability will be accepted by Krystal Clear Accounting which is a trading name of Kim Marlor Associates Ltd or damages of any kind arising from the contents of this communication, or for any action, inaction or decision taken as a result of using any such information.

Related Articles

In short, bank feeds create a digital link between your business bank account and your accounting software, such as Xero or QuickBooks.  

This means bank transactions are automatically downloaded into the accounting software. This simple piece of automation, completely removes the need to manually input every bank receipt and payment into the accounting software. 

Having bank feeds in place, saves a HUGE amount of time bookkeeping. That’s because it completely removes the need to manually input bank transactions into the accounting software. 

Saving time bookkeeping isn’t the only benefit for the business…. 

 

 

What are the main benefits to a business using bank feeds?

  • Saves Time & Money Bookkeeping

Bank feeds automate, what was previously, a time-consuming task of entering all the bank transactions into the accounting software. 

 This saves the business a HUGE amount of time (& money) spent on bookkeeping.  

  • Improves Cash Flow Visibility

With bank transactions being downloaded from the bank every day, it means it’s quicker and easier to keep the bank balance in the accounting software up-to date. 

With the accounting software up-to date, the bank is updated daily which gives you a clearer, real-time view of your business’s cash flow.  

This makes it easier for you to plan your cashflow, and take action to improve it. 

  • Enhanced Accuracy

There is always the risk of errors being made when data is being manually inputted into the accounting system. It is often time-consuming to find and correct any errors. Also, if an error is large then the Profit & loss and Balance Sheet reports will be inaccurate and potentially misleading. 

 Automating the bank transaction entry previously manual process, reduces the risk of errors being made and ensures that the bookkeeping records and reports are accurate. 

How to Link Your Bank to Xero

  • 1. Setup Online Banking:

Ensure that your bank account is set up for online banking. This feature is typically available from all major banks. 

  • 2. Add Bank Account in Xero:

Log into your Xero account and navigate to the banking section. Select ‘Add Bank Account’ and follow the prompts to search for your bank. 

  • 3. Enable Bank Feeds:

After adding your bank account details, you’ll see an option to set up bank feeds. Click ‘Agree’ to the terms, then securely log into your online banking portal through Xero to authorize the connection. 

 

Are Bank Feeds Safe & Secure?

Yes. 

Firstly, having bank feeds in place ONLY means bank transactions are downloaded into the accounting system. They do NOT give anyone else access to the business bank account. 

 Secondly, XERO has various security measures in place to give you a piece of mind that your financial data is safe and secure: 

 

  • Encrypted Connections: Xero uses advanced encryption technology to secure the data transmission from your bank to Xero. This means your sensitive information is encrypted during transit and cannot be intercepted or read by unauthorized parties. 

 

  • Compliance and Standards: Xero adheres to high standards of data security compliance, thus ensuring that its practices meet or exceed industry security standards and regulations. 

 

  • Regular Renewals: To maintain a high level of security, XERO requires that the bank feed connection is renewed every 90 days. This process is straightforward and helps ensure that the integrity of your financial data is always protected. 

 

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KIm Marlor the MD of Krystal Clear Accounting
krystal clear accounting

In Summary

In short, having bank feeds really saves businesses time and money on their bookkeeping.  

 They automate and eliminate what is otherwise a time consuming and error prone manual process.  

 Bank feeds is just one of the ways technology can be used to help business owners improve the financial side of their business.

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