Here are 5 key financial metrics every founder should track monthly to truly stay in control:
KPI: Key Performance Indicators
KPIs are quantifiable metrics that track business performance.
Every business is different, but every business needs clear KPIs.
Tip: Choose 3 – 5 KPIs that align with your goals and review them monthly.
Gross Profit Margin
Gross Margin = (Revenue – Cost of Goods Sold) / Revenue
It shows how efficient your business is before overheads.
Example: If you earn £100k and spend £60k on direct costs, your margin is 40%.
⚠️ Declining margin? It may signal pricing issues or supplier inefficiencies.
Net Profit Margin
Net Profit = What’s left after all costs: salaries, tax, rent, marketing, subscriptions etc.
It’s your real profitability.
Benchmark: Healthy UK small businesses often target 10 – 20%.
Don’t just look at this once a year. Track it monthly to catch issues early.
Cashflow Forecast
Even profitable companies run into trouble without cash.
A rolling 3 – 6 month forecast shows when money enters and leaves your account.
Ask yourself: “Can I cover VAT, payroll and supplier bills next quarter?”
We build forecasts that answer that.
💡 Remember – Cash is king!
DSO: Days Sales Outstanding
DSO measures how quickly your business collects payment for invoices.
High DSO = cash delays = funding growth out of your own pocket.
Formula: (Accounts Receivable ÷ Total Credit Sales) × Number of Days
Target: Under 45 days is healthy for many SMEs in the UK.
Other KPIs to watch
• Operating profit margin
• EBITDA
• Revenue per client
• Creditor days
• Debt-to-equity ratio
Not sure which metrics matter most to your business?
If you’re unsure about even three of these – let’s talk. We help UK-based founders build clarity, confidence and calm with their numbers.
📩 Message us to book a call.