Effective KPI reporting is built on transparency, accountability, and comprehensive communication. It can help businesses to reduce costs, identify new opportunities, and make better decisions. It provides an opportunity for staff at all levels of a business to reflect on their performance and, if required, take actions that improve the overall performance of the business.
This short article will show you how to take control of the KPI reporting process.
What is a KPI report?
A KPI report provides a summary of your business performance compared to your objectives.
It can be presented in a number of ways, from spreadsheets and slides, to written reports and visual dashboards.
Read more: Harnessing KPIs for Better Business
A 5-step guide to effective KPI reporting
1. Consider your audience
Who are you communicating to? What information is most relevant to them? And how do they best absorb information? You should be catering your reports to an intended audience so they can derive valuable insights specific to their role.
You should also consider how information is reported relative to your business structure. To avoid information overload, detail should be removed as you move up the management structure. Upper management will generally only require an overview, but a manager dealing with day-to-day operations would benefit from a more granular analysis of the data.
2. Link to strategy
KPI reports help your staff and stakeholders to assess the company’s strategic goals and their potential to succeed.
Therefore, a KPI report must be linked to the overall strategic objectives of your business in order to provide the reader with the level of understanding they require. This link ensures that the data and trends are seen within the wider context of the business’s strategic plan.
3. Show trends
Measuring performance consistently over set time periods provides you with more valuable information than measuring performance in isolation over a single time period. Derive trends from the data and present them in a meaningful way that shows your staff how business performance is tracking over time. For example, tracking debtor days will show how your debts are collected overtime and the time it is taking for cash to make its way into the bank accounts.
It’s also important to explain what a particular trend in the data means. For example, an upwards curve is not always a sign of improvement. It’s also an opportunity to explain how the company intends to improve or maintain trends.
Benchmarking your performance against relevant competitors or industry standards is a valuable insight for your staff and stakeholders and should be included as part of your reporting.
This helps to define who the company’s main competitors are, and helps to put the company’s performance into a wider, industry-scale context. Make sure to explain why specific competitors have been chosen as benchmark organisations.
Projecting a bunch of numbers and spreadsheets onto a whiteboard is likely to result in information fatigue. It’s not going to inspire your staff and it’s unlikely to lead to a greater understanding of how the business is tracking. It’s important to invest in how your KPI reporting is presented as most people prefer to consume data visually.
Bring your data to life with attractive charts and graphs that not only present the numbers in a coherent way, but also tell a story of how your business is performing. An easy way to do this is by using KPI dashboards; software that collects, groups, organises, and visualises your important metrics, providing a quick overview of business performance and expected growth.
6. Be consistent
You should be reporting back to your team regularly and consistently. Seeing as your KPIs are set with specific time-frames, you shouldn’t be focussed on the same targets for months or years into the future. Demonstrate progress by providing staff and stakeholders with regular updates. We recommend no more than 12 times a year as real-time reporting can lead to information overload and staff can get too bogged down in detail without analysing the bigger picture.
Learn more about using KPIs to maximise your business performance in our free ebook!