KPI, or key performance indicators, are ways for business owners and managers to measure performance in various key areas of the business. There are many KPI that can be measured for different businesses. Investors and banks look at KPI when they consider becoming involved in a business to make sure its prospects look good.Usually used to show the status of a business, KPI have a second important function: to allow businesses to set achievable goals. Once KPI are known, plans for growth and for improvement in key areas can be made.
Examples of KPI
Some of the KPI common to most businesses include profit margin, net profit, and aging accounts payable and receivable. Looking at these numbers shows whether a business is profitable, how much profit it is making, whether it is being paid and whether it can pay its bills in a timely manner.
KPI specific to retail businesses include employee retention, labor costs as a percentage of gross income, inventory costs, and ROI (return on investment) of marketing dollars spent.
KPI specific to corporations that sell products and services might include total sales, returns, and indicators of customer service performance like first call resolution and number of repeat customers.
Business Cash Advances and KPI
A business cash advance is not a loan, it is a purchase of a business's future sales. Because cash advances aren't loans, providers are not regulated the same way as banks: therefore, no credit checks are needed. Business cash advance providers use different criteria to determine creditworthiness and risk, such as sales numbers from the previous 6 to 12 months.
In fact, where a bank loan or credit card impacts a business's credit rating and can leave them ineligible for further financing, a business cash advance has no impact on a business's credit rating, except possibly an indirect positive effect.
Benefits of Business Cash AdvancesBecause cash advances don't go against your credit, they can be used to pay overdue accounts and improve KPI like aging accounts payable. By leveling out a business's cash flow, a more accurate picture of the overall business may emerge. Instead of seeing jagged ups and downs depending on which weeks or months are studied, cash advances can allow businesses to proceed on a much more even keel. If late fees are avoided, this can help offset the fees involved in a business cash advance.
Other advantages of business cash advances are that the repayment period is relatively short, the funds are disbursed quickly, in days rather than weeks or months, and payments are taken out of gross receipts daily. By automatically withdrawing a percentage of daily gross sales, the payments never become unwieldy enough to shut the business down if there are a few slow days or weeks.
At Quikstone Capital Solutions, we pride ourselves in helping businesses get the financing they need to meet all their needs. Find out how easy it is to apply for a business cash advance today.
