Leaping to KPIs: more tools out there to make better use of data.

• Author: Blitz, Adam
• Position: Tech Talk

Key performance indicators are all the rage. At some point, a marketer caught wind of this new term for ratios or metrics. As an outsourced CFO, I find myself having fewer discussions with my clients about balance sheet or profit and loss reports, and more and more discussions about relevant real-time metrics that dispose the meaning between business success or failure.

Getting to this point is no easy feat without many of the cloud applications available today.

When I started in public accounting way back in 2004, the tools to easily collaborate and generate the information needed to calculate metrics on a regular basis were time consuming and cost prohibitive to my clients. I recall working on several financial statement review projects where by the end of the year we would analyze financial ratios for test purposes, yet rarely communicate this data to the clients for their benefit.

These calculations were mostly done with an Excel template whereby only a couple of numbers had to be pulled from the trial balance to understand the ratio. The point is that even just a couple of numbers being pulled from the trial balance into a second spreadsheet is a process that is unsustainable in today's critical era of maximizing the efficiency of every minute.

Today, I want my KPIs to be live when I want them with a simple refresh button and in a pretty graph. Luckily, these dreams have become realities. Over the last several years cloud-based applications utilizing API integrations have popped up to offer simple management of data coming into the business.

Dashboard applications for accountants, such as Fathom or Spotlight Dashboard, provide simple opportunities to take financial data from accounting software to automatically calculate the KPIs clients desire.

Furthermore, the opportunity exists to link non-financial data to compare to the financial data. A simple example of this financial vs. non-financial data would be to understand the number of clicks on a client's Facebook page as compared to the amount spent on Facebook advertising.

Before you begin pushing new KPI data over to your clients, here are a couple of issues to consider:

1. Focus on financial data. Being the CPA, it's our job to ensure that the financial data is timely and accurate. Clients who are unable to rely on their financial data are unable to rely or believe the data flowing into the KPI calculation. As an accounting system is developed and managed, ensure that it's capturing...