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How to monitor the financial performance of your company?

No matter how closely you monitor you financial performance, it may not be enough. Today’s climate and fast-paced uncertainty demands even closer scrutiny, more frequent and more focused analysis.

Here we explain you how to monitor the financial performance of your company. Which financial KPIs do you need to monitor? How to collect the relevant data? And how often do you need to evaluate your performance?

Which key financial KPIs do you need to monitor?

  • EBITDA: Is a measure of a company’s overall business performance, showing earnings before accounting and financial deductions.
  • Working capital: Is a measure of financial resources needed by a company to ensure its production cycle and its repayment of both debts and operational expenses.
  • Debt ratio: Is the proportion of a business’ assets that are financed by debt. This ratio measures the extend of your business’ leverage.
  • Free cash flow: It shows how much money a company is able to generate after paying for operations (salaries, supplies…) but also its capital investments.
  • Profit margin: It represents what percentage of sales has turned into profits.
  • Gross profit margin: Is the difference between the revenue linked to product sales and the cost of the sold goods.
  • Net profit margin: Is the ratio showing how much of each euro in revenue collected by a company translates into profit.
  • Self-financing ratio: It indicates the company’s ability to finance planned investments from its own resources.
Do you want these key financial KPIs in a PDF version?
Download the infographic: financial KPIs

How to collect the relevant data for your business?

Collecting relevant business data is a team effort. Therefore, this is very important to include your team in this process:

  1. Schedule regular reports from your teams, not just operations but sales and marketing as well.
  2. Centralise the data in one single file and make it easily accessible on a desktop digital dashboard.
  3. Analyse this data to gauge past performance and make future predictions.

How often do you need to review your performance?

Cash flow is something you should check on a daily basis because it will help you to manage your expenses. Our advice is to evaluate performance and adjust targets for the immediate future on a monthly basis, seasonal performance on a quarterly basis, and annually to understand what changed since you set the year’s goals, and why.
monitoring financial performance

Do you want more tips & tricks about your financial performance?

Do you want to know more about how to better analyse the financial performance of your own company? Discover our whitepaper about how to boost your financial performance analysis full of useful advice and practical tips.

Protect your financial performance

Protecting your company has never been so important than now. You are never safe from the default of payment or the insolvency of one of your customers. Very often bad payments and insolvencies lead to a snowball effect.

A trade credit insurance protects your business against the risks of defaults of payment and insolvencies of your customers. You can look towards a prosperous future:

Information 

We monitor the financial health of your customers

Collection

We take care of the collection of your unpaid invoices

Compensation

And we compensate you when your customers don’t pay

Do you want to know more about our solutions of trade credit insurance?

Feel free to contact our team for a tailor-made solution. Our experts will be glad to help you.