1. Scale your business: Using financial drivers and metrics to drive the performance of your business
GrowFL Meeting
July 8th, 2015
C. Russell Slappey, CPA – Managing Partner/CEO

2. DATA DASHBOARD AND KPI MODULE OBJECTIVES
Best practices to secure a “financial pulse” on
where things stand in your business
8 Cash Flow drivers you should know and
understand to drive greater profits
KPI’s and Business Metrics to understand what
drives the performance of your business

3. Wiley Accounting Best Practices

4. Best practices to secure a “financial pulse” on where things stand in your business
So what’s important?
Cash management is KING!
Billing and Accounts Receivable Collections
Accounts Payable and Payment Terms
Regular Financial Statement Review
Budgeting and Forecasting
Inventory Management
Payroll Best Practices
Debt and Capital Structuring

5. Cash Management is KING!
Don’t go by what’s in the bank balance
Reconcile cash balances regularly and timely
Maintain a 13 week cash forecast and monitor regulary

6. Billing and Accounts Receivable Collections
Billing timely is essential – FLASH Reporting
Review Accounts Receivable Aging summary regulary
Trending of you’re A/R Aging buckets
Days Sales Oustanding – A/R/Sales * Days – Lower the number the better!

7. Accounts Payable and Payment Terms
Review Accounts Payable Aging summary regulary
Please stop paying too quickly! Negotiate payment terms

8. Accounts Payable Performance Indicators
Percentage of overdue invoices
Total value of outstanding invoices
Exception processing and corresponding reasons
Percentage of electronic payments
Time taken to process an invoice
Number of invoices processed per full-time employee
Percentage of errors attributed to human error
Average cost per invoice
Number of duplicate payments
Average cycle time to workflow or percentage of invoices in review

9. Regular Financial Statement Review
Timely Reporting of Financial Statements is a MUST!!!
Trend Analysis and Variance Analysis
Accrual versus Cash Basis accounting

10. Budgeting and Forecasting
A written business plan is a wonderful thing! See the future not just the past
Don’t be afraid to change it more than once a year
Use it! Accountability

11. 8 Cash Flow drivers you should know and understand to drive greater profits

12. 8 Cash Flow drivers - what you can do to manage them!
Price Clearly, charging too little can cost you big time!
Cost of Goods Sold (COGS) / Margin Understand your gross margin
Ancillary Sales Very frequently overlooked are “add-ons” to the main products/services
 Service Time Focusing on average service time and identifying the best practices 

13. 8 Cash Flow drivers - what you can do to manage them!
 Errors Mistakes are costly, and very few companies quantify exactly how costly they are.
Compensation / Labor Costs Benchmarking full-time equivalents and driving sales per employee, costs per employee
 A/R Days   Keeping DSO as low as possible is essential to optimum cash flow. 
G&A Expenses Having annual/monthly budgets by location or department and monitoring them on a monthly basis is the main way to drive this cost lower. 

14. KPI’s and Business Metrics to understand what drives the performance of your business
KPI – “Key Performance Indicator”. It’s a metric that helps the business know if things are on track or if something is about to change.
KPI’s measure the business health of the enterprise and ensure that all individuals at all levels are "marching in step" to the same goals and strategies. They also provide the focal point for enterprise-wide standardization, collaboration and coordination.

15. KPI’s and Business Metrics to understand what drives the performance of your business
1.a KPI echoes organizational goals
2.a KPI is decided by management
3.a KPI provides context
4.a KPI creates meaning on all organizational levels
5.a KPI is based on legitimate data
6.a KPI is easy to understand
7.a KPI leads to action!

16. Financial KPI’s and Business Metrics
Current Ratio
Measures the ability of your organization to pay all of your debts over a given time period. 
Working Capital
Measures your organization's financial health by analyzing readily available resources that could be used to meet any short-term obligations. 
Return on Equity
Measures your organization's profitability by examining your ability to generate revenue for each unit of shareholder equity. 
Quick Ratio / Acid Test
Measures the ability of your organization to meet any short-term financial liabilities, such as upcoming bills. 

17. Financial KPI’s and Business Metrics
Accounts Payable Turnover
Measures the rate at which your company pays off suppliers and other expenses. 
Accounts Receivable Turnover
Measures the rate at which you collect on outstanding accounts. 
Inventory Turnover
Measures how often you are able to sell off your in-stock inventory in a given year. 
Net Profit Margin
Measures how effective your business is at generating profit on each dollar of revenue you bring in. 
Gross Profit Margin
Measures how much profit you make on each dollar of sales before expenses. 

18. Sales KPI’s and Business Metrics
Sales Growth
Analyze the pace at which your organization's sales revenue is growing and use that information in strategic decision-making. 
Sales Opportunities
Organizes each opportunity your sales team is currently cultivating by assigning them a status such as "qualified" or "proposal." 
Product Performance
Measure and rank products based on revenue performance to inform your sales team which products are selling well and which products need special attention. 
Sales Target
Measure the number of wins over a specific time period and compare it to a target value and past performance to motivate your sales team. 

19. Sales KPI’s and Business Metrics
Sales by Contact Method
Measures which contact methods are most successful at generating sales so your sales team can allocate their time and efforts accordingly. 
Sales Bookings
Measures the number and value of bookings for a given time period, where a "booking" is a won, signed or committed sale. 
Quote To Close Ratio
Measures the number of formal quotes sent out by your sales team compared to the number of deals closed. 
Sales per Rep
Measure the ability of each of your sales reps to generate revenue for your organization and foster a healthy, productive level of competition amongst team members. 

20. Marketing KPI’s and Business Metrics
Return on Investment (ROI)
Measure how much revenue a marketing campaign generates compared to the cost of running that campaign. 
Incremental Sales
Measures how effective your marketing campaigns are at generating increased revenue and sales. 
Traffic Sources
Measure where your website traffic comes from and provides a comparison of major traffic sources such as Search, Direct, and Referral. 
Purchase Funnel
Measures and analyzes how your audience moves through a campaign from one step to the next. 
Goal Completion Rate
Measure the success of campaigns or websites at reaching a target audience and prompting them to complete a positive action. 

21. Marketing KPI’s and Business Metrics
Keyword Performance
Measures the performance of SEO campaigns using a variety of criteria such as goal completion rate, click through rate and keyword ranking. 
End Action Rate
Measures the last action your audience takes as a result of participating in one of your marketing campaigns. 
Cost Per Lead
Measure the effectiveness of marketing campaigns at generating leads for each dollar spent on that campaign. 
Marketing Engagement Score
Measure how effective campaigns are at generating actions and interactions with your target audience. 
Social Interactions
Measures how effective your social media marketing is at engaging your audience on key platforms.

22. Service Department KPI’s and Business Metrics
Service calls per period (day/week/month)
Lead time – from customer request to delivery
Customer satisfaction (company and service rep)
Length of service calls
Revenue per service calls

23. Manufacturing Department KPI’s and Business Metrics
 Units produced per time period (minute, hour, week)
Time to set up a new production line
Labor hours per unit produced
Inventory management measurements
Quality measurements - scrap percentages
Failure rates and rework rate
On time delivery

24. Retailer Department KPI’s and Business Metrics
 Revenue per square foot
Revenue per labor hour
Inventory availability
Measurement of average sale price of each unit sold
Average discount from list price 
Value of advertising - did we increase gross margin dollars because of the sales promotion

25. Scorecard Measurables
“Anything that is measured and watched is improved”
5 to 15 numbers
Who is accountable?
Expected goal for the week?
Use it!

26. Measurables – 8 Advantages
Numbers cut through subjective communication
Numbers create accountability
Accountable people appreciate numbers
Numbers create clarity and commitment
Numbers create competition
Numbers produce results
Numbers create teamwork
Solve problems faster!

27. Scorecard Measurables
Weekly Revenue
Cash Balance
Sales Calls
Sales Meetings
Proposals
Closed Business
Customer Satisfaction
Accounts Receivable metrics
Accounts Payable metrics
Errors
Utilization/Capacity

28. Conclusion Best practices to secure a “financial pulse” on
where things stand in your business – PUT THEM IN PLACE!
8 Cash Flow drivers you should know and
understand to drive greater profits – MANAGE THEM!
KPI’s and Business Metrics to understand what
drives the performance of your business – CREATE YOUR DASHBOARD AND SCORECARD!

29. Office Locations C. Russell Slappey, CPA Gary Colbert, CPA
Managing Partner/CEO Managing Partner
Office Locations
5971 Brick Court, Suite 100B 2202 N. Westshore Blvd N. Andrews Ave.
Suite 100B Suite Suite 200
Orlando, FL Tampa, FL Fort Lauderdale, FL 33309