What makes a good KPI?

A good KPI is measurable, actionable, timely, and tied to a business objective. It should be something you can influence, not just observe. Every KPI should have a clear target and an owner who is accountable for moving it.

How often should KPIs be updated?

Monthly is the minimum for financial KPIs. Some operational KPIs (e.g., daily active users, support ticket volume) benefit from weekly or even daily updates. Match the update cadence to the speed at which the metric changes and decisions are made.

Should KPIs include targets?

Always. A KPI without a target is just a number. Targets give context and enable performance assessment. Use annual targets broken into monthly milestones so you can track progress throughout the year.

What is cash conversion and why does it matter?

Cash conversion measures how much of your reported profit actually turns into cash. A profitable company with poor cash conversion may still struggle with liquidity. Aim for 80%+ cash conversion; above 90% is excellent. Low conversion usually signals working capital issues.

Example

Finance KPI Dashboard Example

A 70-person professional services company in Glasgow with £5.5M revenue. The CFO has built a KPI dashboard that tracks 8 key metrics monthly. This dashboard is the first page of every management report and board pack, providing a 30-second health check of the business.

Example data

Financial model

KPI

Dec

Jan

Feb

Target

Revenue Growth (YoY)

22%

24%

26%

25%

Gross Margin

62.5%

63.1%

64.0%

65.0%

EBITDA Margin

14.2%

15.0%

15.8%

18.0%

Cash Conversion

88%

92%

95%

90%

DSO (Days)

Revenue per FTE

£6.4k

£6.6k

£6.8k

£7.0k

OpEx Ratio

48.3%

48.1%

48.2%

47.0%

Runway (Months)

18+

Revenue Growth (YoY)

Revenue growth has accelerated from 22% to 26% over three months, now exceeding the 25% target. Driven by strong new client wins in financial services.

DSO (Days)

DSO improved from 42 to 36 days over three months, nearly hitting the 35-day target. The finance team implemented automated invoice reminders and early payment discounts.

EBITDA Margin

EBITDA margin trending toward the 18% target but not there yet. The gap is primarily due to investment in the new data analytics practice, which is pre-revenue.

Formulas

Key formulas

fxCash Conversion = Operating Cash Flow / EBITDA * 100

Cash conversion at 95% means nearly all reported profit converts to cash. Above 90% is excellent and reflects strong working capital management.

fxRevenue per FTE = Monthly Revenue / Average Headcount

At £6.8k per FTE per month (£81.6k annualised), the company is approaching its £84k target. This metric tracks operational efficiency as the team grows.

fxRunway = Cash Balance / Average Monthly Net Burn

With 21 months of runway, the company has ample time before needing additional capital. The improvement from 18 to 21 months reflects improving profitability.

Analysis

What makes this example good

Eight KPIs cover all four pillars: growth, profitability, cash, and efficiency

Three-month trend shows direction of travel, not just a point in time

Targets provide a benchmark for "good" performance

Mix of leading (growth, DSO) and lagging (margin, cash) indicators

Monthly cadence catches trends before they become problems

Customisation

How to adapt for your business

Replace KPIs with metrics relevant to your industry and business model

Add colour coding (green/amber/red) based on distance from target

Include sparkline charts for 12-month trend visualisation

Add a "commentary" column explaining the trend for each KPI

Create department-specific dashboards with operational KPIs

Common variations

--SaaS KPI dashboard (MRR, churn, NRR, CAC, LTV)
--E-commerce dashboard (GMV, AOV, conversion, CAC)
--Manufacturing dashboard (utilisation, yield, throughput, WIP)
--Executive dashboard with only 4-5 headline metrics

Keep exploring

Related examples

Board Report Example

A 90-person fintech company in Edinburgh with £6.5M ARR. The CFO presents a monthly board pack covering financial performance, key metrics, and cash position. This is the February board report, covering January performance.

View example

Monthly Management Report Example

A 110-person healthcare technology company in Oxford with £6.2M revenue. The FP&A team produces a monthly management pack by the 10th working day of each month. This February pack covers January performance and is distributed to the CEO, CTO, VP Sales, VP Operations, and department heads.

View example

Investor Report Example

A 25-person Series A SaaS startup in London with £1.8M ARR. The CEO sends a monthly investor update to 12 investors. The update covers key metrics, milestones, asks, and a brief narrative. This is the February update, sent on the 5th of March.

View example

FAQ

Frequently asked questions

Between 5 and 10 at the executive level. Fewer than 5 risks missing something important. More than 10 leads to information overload. Department-level dashboards can have more KPIs, but the executive view should be focused on the metrics that matter most.

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