Find the right metrics in your business

Nicola van Rijn

When you build your reports, it is important you focus on the metrics that tell the story behind your numbers. What drives your business, what is causing your numbers to be what they are? And more importantly, which metrics can be influenced by management going forward?

Here are some tips to help you find those metrics:

Focus on what really matters in your business

People often loose track of what really matters, and get caught up in too much detail. Good reports should inform your management and stakeholders about the key indicators in the business, and help them to make decisions. You should focus on what matters, and ignore what is trivial.

Remember: focus on what matters, ignore what is trivial.

Focus on what can be influenced

Make sure your reports bring out the underlying factors that drives your business, and that can actively be influenced going forward. Just knowing that revenue is xx% more than last year is of limited use. What did really happen? Did you sell more volume at the same price as before? Of the same volume at a higher price? Or worse, were prices heavily discounted?

XLReporting enables you to combine financial and non-financial data. You can import from multiple data sources and combine everything into your reports.

Visualise the trends

Determine which information can tell a story over a longer period of time. What is changing year-on-year and why? What are the underlying factors that cause that? Are these internal factors or external factors? Can they be influenced?

Identify your dimensions

If your business has multiple companies, dimensions, or data sources, make sure your reports bring that the surface, and allow management to review the performance and profitability of each of these dimensions. Which ones are doing well? Which are not? Most importantly, what can be done about it?

Choose the right level of detail

It is imperative you choose a level of aggregation in your report that provides the optimal information and trend indications without digressing too much in detail. A report that is too detail makes it hard to see the wood from the trees.

XLReporting enables users to dynamically choose the level and detail in reports, using our powerful pivot technology.

Focus on the essence

Always start simple, only add complexity when it is absolutely vital.

Ensure that your reports focus on the essentials in your business, and don't waste time on items that have little relevance.

Conclusion

If you keep these steps in mind, and rigorously implement them, you will greatly improve the quality and usefulness of your reporting.