KPIs are critical for companies to measure, analyze, and monitor performance. Many may look only at their financial KPIs, but operational KPIs can shed light on the “why” behind the financials.
General industry KPIs can include:
- Net income
- Net profit
- Overhead percentage
- Growth percentage
Construction companies may also include KPIs such as:
- Job profitability
- Labor percentage
- Material percentage
As construction companies review their KPIs, it’s important to ask how the operations are affecting financial KPIs. A few questions you may ask as you review your financials are:
- What behavior is this a result of?
- Why is our labor percentage so high?
- Why are overtime wages so high?
- Are we taking longer on jobs than we should be?
- Are we inefficient with our labor, or is something else going on?
- Are we not bidding jobs correctly?
These questions shed light on the day-to-day operations that affect financial metrics. It’s important to look at your KPIs holistically to help find the operational tasks needed to get your financials where you want them.
The Outsourced Accounting Services team at FORVIS can help your company with benchmarking tools and help you establish operational and financial metrics and KPIs. Reach out to a professional at FORVIS today to learn more.