Financial indicators to keep in mind to anticipate cash flow problems
September 2023 - Monitoring and keeping track of the figures are essential to ensure the financial health of your business. But which KPIs should you keep in mind? We have identified seven.
1. Short and long-term cash flow analysis
How is cash flow developing from week to week, month to month?
2. Monitoring payments, including stock rotation
Which customers are paying on time, and who are the bad payers? This information is very useful in managing your debtors. What is your stock turnover rate? This data will help you find the right balance in your stock management.
3. Solvency and working capital requirements
To what extent are you able to repay your loans and borrowings? How much cash does your company need to meet its day-to-day financial obligations (paying suppliers, wages, maintenance, etc.)?
4. Analysis of gross margin or EBITDA
How much of your turnover do you have left after deducting supplier invoices (gross margin)? Or after deducting supplier invoices, interest, tax, depreciation and amortisation (EBITDA)? These figures will enable you to carry out an in-depth analysis of your company's profitability by activity, project, product or location.
5. Prognoses and actual losses/profits
What were the profits and losses in recent months? How much profit/loss will you make in the next few months, given the various plausible scenarios?
6. Monitoring HR costs
What are your staff costs? What is your employee productivity rate? What is the absenteeism rate?
7. Sales monitoring: CRM, pipeline and forecasts
What about your short- and long-term sales pipeline?
Real-time data thanks to a direct link with your accounting package
Tools for creating dashboards and reports make it easy to monitor the indicators detailed above. The figures are taken directly from your accounting package and compiled into a complete dashboard, complete with tables and graphs. The data is constantly updated. Every change in your accounts is reflected in the dashboard, without any manual intervention on your part.
