Understanding cash flow is one of the primary steps in making sure your business finances are sustainable. Cash flow is the amount of money coming into and leaving your company during a specified timeframe. If you have more money coming in than leaving, you have a positive cash flow and that’s a strong indicator of financial health. But there’s more nuance to the calculations and understanding cash flow metrics and key performance indicators (KPIs) can help you make sure you have enough funds to pay your bills and grow your business.

In this article:

  • 24 cash flows metrics and KPIs: formulas, calculations and examples
  • Choose the right cash flow metrics for your business
  • Why you need cash flow scenario analysis

What Are Cash Flow Metrics?

A metric is any quantifiable measure of a business function. Cash flow metrics are financial indicators that show how effectively a company is performing. These measures can also help you make decisions and assess the quality of economic policies. Investors also use the information to compare companies.

Key Takeaways

  • Measure cash flow with KPIs and metrics, and use them to benchmark against historic data and other similar businesses.
  • Cash flow management KPIs can help you understand current and potential financial position so you can make better informed business decisions.
  • Targeted KPIs and metrics enable your business to respond rapidly in times of financial crisis.

Cash Flow Metrics vs. Cash Flow KPIs

Cash flow metrics are simple measures of information and are often found on financial statements. KPIs, on the other hand, give more insight and add meaning to the metrics. For example, seeing a metric of net income is helpful, but it becomes meaningful when other information, such as performance over time or how assets relate to liabilities, etc., are factored in. KPIs for cash flow are financial metrics that guide management and stakeholder decision-making.

Is cash flow a KPI?

Cash flow statements are summary documents that detail the cash or cash equivalents going into and leaving your business. There are many cash flow related KPIs, including operational cash flow and working capital measures.

Cash flow vs. profits

Cash flow is different from profits. Cash flow measures money coming into and going out of the business. Profit is the money left over after the business pays its bills.

How Do You Measure Cash Flow?

A cash flow statement shows how much cash your company takes in and spends over a given period of time, while the balance sheet gives insight into the health of your company, including information about its liquidity, changes in assets and liabilities and shareholder equity. The cash flow statement is one of three financial documents that must be filed with the SEC by publicly traded companies (the other two are the income statement and balance sheet).

How to measure cash flow performance

Cash flow statements include three components. This information provides you, as well as potential investors, with insight into your company’s financial health.

  • Operating activities, including transactions from buying and selling inventory, supplies and paying salaries and wages.
  • Investing activities, such as treasury notes or other securities, as well as gains or losses from the sale of equipment.
  • Financing activities, which include interest fees paid or received, payment of long-term debt, issuing debt or stock, and payment of dividends.

What is a good cash flow ratio?

There are many cash flow ratios and KPIs you can use to better understand the financial footing of your company. One of the most common is the current or working capital ratio. This KPI looks at your current assets and liabilities. A good rule of thumb is if your ratio is more than 1:1 of assets to liabilities, you can meet financial obligations — though there is some nuance to it, which is why it's vital to track multiple KPIs to get a better picture of financial state.

Top Cash Flow Metrics and KPIs

The best cash flow metrics and KPIs tell you about your company's financial well-being and potential. Investors can calculate some of these metrics using figures from financial statements.

Many of these metrics help investors understand a company’s finances. For business owners and stakeholders, KPIs give insight into important decisions, for example, they might inform a decision to pursue new product lines or even when internal processes, such as accounts receivable, need revamping.

1. Operating cash flow

Operating cash flow (OCF) is the movement of money into and out of a business. It’s usually listed first on the cash flow statement and is sometimes listed as “cash flow from operating activities” or “net cash generated from operations.” This metric does not include revenue from interest or investments. Excellent operating cash flow is enough to support the business's activities on its own without additional loans or outside investment.

Operating cash flow = Net income + Non-Cash Expenses + Change in Working Capital

Using the income statement, calculate the operating cash flow KPI by adding the net income and the non-cash expenses, then subtracting any working capital increases.

In one cash flow KPI example, a large telecommunications company reported the following on its cash flow statement (in millions):

  • Net income: $7,500
  • Depreciation and amortization: $20,000
  • Inventory adjustments: -$13,000
  • Accounts receivable adjustments: +$2,200
  • Accounts payable adjustments: -$1,400

This company’s OCF = $7,500 - $2,200 + $13,000 -$1,400 + $20,00 = $36,900.

This result is a good year with plenty of operating cash flow for this company.

2. Working capital

Working capital is a measure of liquidity, indicating how quickly a business can generate cash. Short-term investments that could be converted to cash in less than a year, cash and accounts receivable all help inform this metric. Additionally, liabilities such as accounts payable will come into the formula. Your liabilities and assets should be listed on your balance sheet. Express this metric as a ratio.

Working capital = Current assets / current liabilities

A working capital ratio greater than 1 means that your company can pay its current liabilities.

For example, a company's balance sheet has $400,000 in current assets, considering its cash, accounts receivable and inventory. It has $215,000 in liabilities, considering its accounts payable, short-term debt, recent notes payable, payroll and accrued expenses.

This company’s working capital ratio = $400,000 / $215,000 = 1.9. This result shows this company has almost $2 in assets for every $1 in liabilities.

3. Forecast variance

It’s common and helpful for companies to predict future financial positions with forecasts. Forecast variance, also known as the variance formula, shows the difference between the forecast and the outcome. Tracking over time helps you understand and improve forecast accuracy. Express this as an integer or a percent.

This company’s forecast variance = [($12,500-$10,000) / $10,000] x 100 = 25%. A significant event may have helped improve the business in January. This can inform future forecasts.

4. Days Sales Outstanding

Sometimes known as debtor days, days sales outstanding (DSO) reflects the average number of days to receive payment for sales.

Days sales outstanding = (Average accounts receivable amount in a given period / total credit sales in the same period) x number of days in the period

A low DSO means that buyers are paying your company for services or goods quickly. A high DSO could indicate issues with collections, which can impact your cash flow.

For example, an office furniture retailer has accounts receivable of $40,000 for the quarter. For the same quarter, the value of sales is $240,000. There are 90 days in the quarter.

This retailer’s DSO for this quarter = ($40,000/$240,000) x 90 days = 15 days. The standard for what’s a reasonable DSO varies by industry. In retail, that might be around seven days, where in manufacturing it might be closer to 60. Monitor trends over time and compare your performance against peer companies.

5. Days Payable Outstanding (DPO)

Also known as creditor days, days payable outstanding (DPO) is the average time it takes a company to pay its invoices or accounts payable.

DPO = (Average accounts payable / cost of goods sold) x number of days in accounting period

A greater number of DPO could also mean more cash on hand to invest in the short term. However, excessively high DPO means that companies are at risk of losing their creditors or good credit terms. DPO that’s too low means that a company is not taking advantage of its credit period.

For example, a company's accounts payable averages were $400,000 per year. Its COGS for that same year is $5,500,000. The number of days in that period is 365.

This company’s DPO = ($400,000/$5,500,000) x 365 = 27 days. Therefore, this company takes an average of 27 days to pay its accounts payable. Around 30 days for creditor days is usually considered an excellent DPO.

6. Accounts receivable turnover

Also known as debtor turnover ratio, the accounts receivable turnover ratio gives insight into the efficiency of your company's debt collection.

Accounts receivable turnover ratio = Net credit sales / Average accounts receivable

High AR turnover indicates a company is good at collecting from its customers. The more times a business turns over accounts receivable, the more money it collects. Similarly, low AR turnover means a business either has difficulty collecting from customers or that is offering payment terms that are too flexible.

For example, a company has a beginning accounts receivable for the year of $50,000 and an ending accounts receivable of $54,000. Its average accounts receivable for the year = ($50,000 + $54,000)/2 = $52,000. Its net credit sales for the year were $600,000.

This company’s accounts receivable turnover ratio = $600,000/$52,000 = 11.54. This means that the company turned its receivables to cash 11.54 times for the period. Whether this ratio is appropriate for this company depends on its payment policy.

7. Accounts payable turnover

Also known as the creditor's turnover ratio, accounts payable turnover is the number of times a company pays its creditors in a given period. This metric is a measure of short-term liquidity.

Accounts payable turnover ratio = Total purchases on credit / [(beginning accounts payable + ending accounts payable)/2]

For example, a company has a beginning accounts payable of $5,000 and ending accounts payable of $15,500 during a year. For that period, the business purchases, on credit, $20,000 worth of new equipment.

This company’s accounts payable turnover for the period is $20,000/[($5,000 + $15,500)/2] = 2.7. This means that the business pays its average accounts payable balance more than two times every year. Compare this value to other companies in the industry and the vendor payment terms.

8. Current ratio

The current ratio is a measure of a company's ability to pay off its short-term liabilities. Note that liquidity and cash flow are not the same thing — a company can have negative cash flow but still be highly liquid if they have a stockpile of cash.

Current Ratio = Current assets / current liabilities

Current assets should include accounts receivable, and current liabilities should include accounts payable and accrued expenses. A higher current ratio is a sign that your business can pay off its short-term debts. In general, between 1.5 and 2.5 is considered a good liquidity. If your current ratio is 1.5, that means your company has $1.50 for every $1 in current liabilities. Keep an eye on this ratio because low ratios can indicate problems covering upcoming bills.

For example, a large company reports (in millions) current assets of $45,000 and current liabilities of $39,000.

This company’s current ratio = $45,000/$39,000 = 1.15. This value means that this company is meeting its financial obligations but could improve.

9. Return on equity

Return on equity (ROE) is an ROI metric that indicates a company's net income compared to its shareholder equity.

Return on equity = (Net income / average shareholder’s equity) x 100

Ideally, this percentage will increase over time, indicating how well a company is using its investors’ money — what sort of return it’s getting for the money it’s raised. An ROE that decreases over time could be a sign of poor investing decisions.

For example, a large company has (in millions) earnings that year of $40,000 and $390,000 in shareholder equity.

This company’s ROE = ($40,000/$390,000) x 100 = 10.26%. Tracking the ROE over time and comparing to previous years shows trends and gives insight into the potential financial future of the company.

10. Cash flow from operations

What is cash flow from operations? Cash flow from operations, or operating cash flow, is the amount of cash a company generates from its daily activities, such as selling goods or providing services, over a given time — often a quarter or fiscal year.

Cash flow from operations = Net income + non-cash items + changes in working capital

For example, a company has (in millions) an operating income of $8,500, depreciation of $0 and changes in working capital of -$1,200. This business’s cash flow from operations = $8,500 + $0 -$1,200 = $7,300. This finding means that this company generated $7,300 in cash flow that year.

There are some limitations with operating cash flow. It doesn’t include the costs of buying and maintaining fixed assets or the effect of changes in working capital. This means sometimes operating cash flow does not illuminate when a business is struggling. And free cash flow takes these and other factors into account, which provides a more complete picture of your company’s ability to grow and pay its bills and investors.

11. Free cash flow

Free cash flow (FCF) is a figure that shows how much money is left over after paying short-term liabilities and purchasing property or equipment. The remaining funds can either be reinvested in the business or used to pay dividends. Free cash flow is about showing how much surplus cash flow is available after operating expenses and capital expenditures.

Free cash flow = Operating cash flow – capital expenditures

You can use a high amount of FCF to pay off debt, make investments and attract investors.

For example, a small business reported $53,000 for its operating cash flow and spent $15,000 on new equipment for the period. This business’s free cash flow = $53,000 - $15,000 = $38,000. This finding means that the small business has $38,000 to use to improve its operations.

12. Cash flow coverage ratio

The cash flow coverage ratio (CFCR) looks at your company’s ability to pay its debts with its cash flow from operations.

Cash flow coverage ratio = (Cash flow from operations / total debt) x 100

For example, in a company's cash flow statement (in millions) last year, its cash flow from operations was $11,500, and total debts were $86,000. This company’s CFCR = ($11,500 / $86,000) x 100 = 13.37%. Next, you can estimate how long this debt would take to pay off if all these conditions stay the same. The number of years = 1/13.37% = 7.5 years.

13. Operating Cash flow margin

The cash flow margin examines the cash coming from operating activities as a percentage of sales revenue in a specified time frame. A positive percentage here is a good indicator of business profitability and efficiency.

Cash flow margin = (Cash flow from operating activities / net sales) x 100

For example, a company had (in millions) cash flow of $5,000 and net sales of $9,200, and its cash flow margin = ($5,000 / $9,200) x 100 = 54.3%. This finding shows good profitability.

14. Cash flow from investments

Cash flow from investments shows the cash earned and/or spent on investing opportunities, such as selling equipment, real estate or stock.

Cash flow from investments = Amount generated from sales of assets – cost to buy assets

If, for instance, a company sold its old equipment for $150,000 and bought new machinery in the same period for $300,000, its cash flow from investments = $150,000 - $300,000 = -$150,000. This result is just one piece of the cash flow statement and is not a cause for concern by itself since it could show investment in the business.

15. Levered cash flow

Levered cash flow (LCF) is the cash that a business has after meeting its financial obligations, such as operating expenses and interest. Unlevered cash flow is before the company meets its obligations.

Levered cash flow = EBITDA – change in net working capital – capital expenditures – debt payments

Levered cash flow is money a company can use to pay out dividends and invest in the business. A higher LCF makes the business attractive to financers.

For example, a company's figures for a year are $300,000 in EBITA, $120,000 in working capital, $40,000 in capital expenditures, and $100,000 in debt payments. This company’s LCF = $300,000 - $120,000 - $40,000 - $100,000 = $40,000. Negative LCFs can happen some years, based on the investments in the company.

16. Cash flow from financing activities (CFF)

Cash flow from financing activities (CFF) is the information from a company's cash flow statement that details the net cash flows funding the company. This metric tells investors about the company's financial strength.

CFF = Cash inflows from issuing debt or equity – (cash paid as dividends + repurchase of debt and equity)

This measure details the company debts, equities and dividends. It can vary under different terms of debt, dividend policy or capital structure. The CFF is a section in the cash flow statement.

For example, a company has the following information on its cash flow statement for inflows and outflows (in millions):

  • Long-term debt proceeds: $2,000
  • Dividend payments: $300
  • Repurchase stock: $800

This company’s CFF = $2,000 – ($300 + $800) = $900. Compare this CFF across years for this company.

17. Cash conversion cycle

The cash conversion cycle (CCC), also known as the net operating cycle, is a measurement of the company's time to convert its investments and inventory to cash, usually measured in days.

Cash conversion cycle = Days inventory + Average collection period – DPO

This KPI also accounts for how long it takes a company to sell off inventory, accounts receivable and accounts payable. There are three stages to this cycle.

Days inventory outstanding looks at the amount of time it takes to sell your inventory. The second stage is the days sales outstanding, which is the time it takes to collect money from sales and the third stage is the time it takes for the company to pay off its obligations.

For example, a company reported (in millions) $2,000 in average inventory, with COGS at $50,000. Its average accounts receivable for this period was $5,000 and credit sales were $100,000. Finally, this company reported its average accounts payable as $1,200. Putting this together, in the first stage, the DIO = ($2,000/$50,000) x 365 = 14.6. Then with the second stage: DSO = ($5,000/$10,000) x 365 = 18.25. And finally, the third stage: DPO = ($1,200/$50,000) x 365 = 8.76. Together, the CCC = 14.6 + 18.25 – 8.76 = 24.09. It takes this company about 24 days to turn its original cash investment to inventory and then back into cash.

18. Total available liquidity

The total available liquidity is the aggregate sum of all cash and cash equivalents on hand for a company. This metric can also include the company's borrowing capacity.

Total available liquidity = Cash and cash equivalents + marketable securities + accounts receivable

By itself, this measurement does not mean a lot. Most companies use these figures as a ratio against liabilities. Available liquidity can help gauge standing before making financial decisions.

For example, on its balance sheet a company has (in millions) cash of $50,000, marketable securities of $40,000 and accounts receivable of $80,000. This company’s total available liquidity = $50,000 + $40,000 + $80,000 = $170,000.

19. Liquidity ratio

Also known as the quick ratio or acid-test ratio, the liquidity ratio is a metric that shows how well a debtor can pay off its current debt without acquiring additional capital. This KPI is a short-term metric of financial fidelity.

Liquidity ratio = (Cash + securities + accounts receivable) / liabilities

Liquidity ratios are most valuable when analysts compare them to previous periods or to those of other companies of similar size in the industry. This ratio excludes inventory from its calculation.

For example, on its balance sheet, a company has (in millions) cash and cash equivalents of $45,000, short-term marketable securities of $50,000, accounts receivable of $20,000 and total liabilities of $100,000. This company’s liquidity ratio = ($45,000 + $50,000 + $20,000)/$100,000 = 1.15. This liquidity ratio is greater than 1, so many companies would consider it good. This figure means that this business has enough working capital to pay its liabilities.

20. Daily and weekly aged debtor analysis

Accounts receivable aging is a list of all the debts your company is owed ordered by how long they’re outstanding. Keeping an eye on how long it takes to receive payment for products or services is a good signal of accounts receivable practices. And if it takes longer than normal to receive payment, it could be an indicator that your company should reevaluate its credit practices. Track this over time and compare against peer industries.

Daily and weekly aged debtor analysis = (Trade receivables / sales in annual credit) x 365 days or 52 weeks

For example, a company has (in millions) $4,000 in trade receivables — or the amount of money owed to the business — and sales in annual credit of $20,000. This company’s daily debtor analysis = ($4,000/$20,000) x 365 = 73 debtor days. The debtor weeks = ($4,000/$20,000) x 52 = 10.4 weeks. Use benchmarking to determine if the days or weeks is appropriate for your industry.

21. 30-day and 13-week operating cash burn

Also known as the burn rate, 30-day and 13-week operating cash burn are the rates a company uses its cash in short- and medium-term scenarios. Some cash burns are due to seasonal trends, not failing businesses. Companies should carefully monitor periods of cash burn.

30-day and 13-week operating cash burn = [(Starting balance of 13 week period – ending balance of 13 week period) / 3] x 3.25

Positive burn rates show that a company is spending more than it is taking in. A 13-week period is a standard in medium-term scenario planning, and many companies have their cash flows built for a rolling 13-week report.

For example, in the beginning quarter of the year, a company has $150,000 in starting balance for cash flow. At the end of this period, the company has $90,000. For the 30-day burn rate = ($150,000 - $90,000)/3 = $20,000. The 13-week operating cash burn = $20,000 x 3.25 = $65,000.

22. Weeks of liquidity on hand

Weeks of liquidity on hand is a measure of the liquidity available. This can be particularly helpful to understand to plan for times of economic stress. This metric shows how many weeks a business can pay its current financial obligations.

Weeks of liquidity on hand = (Current assets / current cash outflow per week) / 52

Run different scenarios based on various economic stress situations.

For example, a small business sees major economic stress coming. The company wants to know how long it can stay in business if it turns some assets into cash. It has $500,000 in current assets and a total of $20,000 in spending per week. This business’s weeks of liquidity on hand = $500,000/ $20,000 = 25 weeks. In times of economic crisis, many businesses look at cuts they can make to their cash outflows to stabilize cash flow.

23. Sustainable growth rate

A sustainable growth rate (SGR) is the maximum growth a company can have without taking on additional debt. This growth should come from improved revenue, not new loans.

Sustainable growth rate = ROE x (1 - dividend payout ratio)

High SGRs show maximized sales, high-margin products and/or a well-managed inventory. A sustained high SGR is difficult for companies to achieve, as there will likely be a saturation point for growth without investment. Some companies then move into new products or product lines when they are at risk of stagnation.

Calculate the SGR using the return on equity (ROE) from shareholder's equity and the dividend payout ratio from the financial statement. Remember, ROE is a company's net income compared to its shareholder equity and is expressed as a percentage. And the dividend payout ratio is the earnings your company pays shareholders as a percentage of the business’s earnings. For example, a firm has an ROE of 10.26% and a dividend payout ratio of 45%. This firm’s SGR = 0.1026 x (1- 0.45) = 0.0564 or 5.64%. This finding means that this business can grow at a rate of 5.64% without taking on any more debt by using its current sales. It will require additional financing if it wants to increase this SGR.

24. Price-to-cash-flow ratio

The price-to-cash-flow (P/CF) ratio is the company's worth based on its cash flow. Investors use this metric to see if the company valuation is fair and how much cash their investment generates.

Price-to-cash-flow ratio = Share price / (operating cash flow / outstanding shares)

A low P/CF ratio could indicate the organization is undervalued, and a high ratio may mean it’s overvalued. These figures also depend on their industry and maturity in the market. Newer companies may trade at higher ratios due to their growth potential.

Calculate the price to cash flow using the average stock value from at least 60 days and the cash flow per share using the trailing 12-month operating cash flows divided by the number of outstanding shares.

For example, a large company has (in millions) 15,000 shares outstanding and $60,000 in operating cash flow. The price of its shares for that period was $16 each. This company’s P/CF = $16/($60,000/15,000) = $4. Review the P/CFs of multiple years and different companies within the industry.

Why Cash Flow Scenario Analysis Is Important

When your company looks at and evaluates possible future scenarios and predicts outcomes, that’s called scenario analysis. It can show investors and stakeholders possible effects of various financial investments, activities and situations. Scenario analysis also helps companies set plans before crises happen.

A cash flow metrics analysis is when a business looks at the line items on its cash flow statement and draws conclusions for the state of the business. There are three main types of cash flow analyses.

  • Cash from operating activities: This is money from customers minus operating expenses. These expenses include salaries and wages, rent, utilities and supplies.

  • Investing activities: This includes long-term, or capital investments, like property equipment in a plant and stock or securities.

  • Financing cash flow: This funding comes from investors, owners and creditors. It’s classified as debt, equity and dividend transactions on the cash flow statement.

Performing cash flow analysis can help your company plan for the future so when disaster strikes or growth opportunities arise, the first step of planning how to react is already complete. Here are a few benefits of cash flow scenario analysis.

  • Better planning for the future: Showing investors what could happen if they choose to fund your company and giving examples and models of growth can encourage them to support your firm.

  • Anticipate risks: What’s the worst-case scenario for how things could go for your business? By examining for future disasters or even just unfavorable outcomes, your company is better prepared to weather storms.

  • Improving company culture: By taking a proactive approach with scenario analysis, you can help build a data-driven company culture.

Visualizing Cash Flow Metrics and KPIs

Tracking these and other cash flow metrics and KPIs is best done with powerful finance management software. These platforms can analyze the data and serve up KPIs, metrics and reports in cash flow dashboards, often with visualizations to better understand the information and implications. The most advanced finance management tools can provide real-time data in these dashboards.

Which KPIs you choose to display will vary on a few factors — company size, industry, etc. Some of the most common and insightful KPIs to show on your dashboards include:

  • Actual cash flow
  • Forecast cash flow
  • Net debt and liabilities
  • Liquidity metrics: actual and forecast
  • Opening and closing cash balances

These metrics give companies a quick look at financial position and could inform if there are adjustments that need to be made.

Best Practices for Managing Cash Flow

Monitoring cash flow has many benefits for a business. One of their best uses is helping you plan for and address any shortfalls. These best practices can help you keep your organization solvent and maintain a steady cash flow.

  • Offer customers incentives to pay at the point of sale or early.

  • When possible, negotiate terms with vendors to extend your payment terms to net 60 or net 90.

  • Identify and address any cash flow issues early to avoid long-term harm to your business. Some of the best ways to do address cash flow concerns include accessing a line of credit, improving invoicing processes and cutting costs by identifying waste.

  • When possible, automate your invoicing with finance software so invoices are sent promptly and payment is received more efficiently.

  • Create a back-up plan and have some cash reserve on hand to cover shortfalls when they occur.

  • Pick a software tool for your financial data monitor KPIs regularly.

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How to Pick the Right Cash Flow KPIs for Your Organization

Which KPIs you choose to monitor will vary depending on your industry, business and even roles within your company. For example, executives may be most interested in medium and long-range goals, while line managers may be more focused on short-term metrics of success. Regardless, there are some general guidelines when selecting your goals. Try to be specific about what you want to achieve, realistic about what’s possible and remember that not all KPIs will apply to everyone in the business. Setting appropriate business goals that teams can work toward is a fundamental practice that can greatly influence growth and financial health.

  • Choose qualitative and quantitative measures. Quantitative data can be found on your financial statements. Look for other data describing how you get to the numbers with qualitative measures. Some examples of qualitative information to include might be customer satisfaction, events that have harmed your business’s reputation or high employee turnover.

  • Use leading and lagging indicators. Most KPIs look at lagging indicators such as profit and revenue. Complement these with leading indicators that give you an idea of how long it may take to reach specific financial goals. Leading indicators could include average inventory, average receivables and average collection days.

  • Don't measure everything. Stick to your business goals to guide your choices. Don’t get bogged down in trying to analyze every KPI and metric available. Instead, identify those that would be most meaningful for your team and where you can have the biggest impact and focus your efforts.

  • Use trend data. Compare your data with results for other periods and with other companies in your industry. These comparisons can help add context to KPIs and metrics, as well as help you set reasonable and achievable goals.

  • Leverage software solutions. Advanced software solutions are critical for monitoring cash flow and other KPIs. The most powerful enterprise resource planning (ERP) software integrates data from around your business — including inventory management, human resources, customer relationship management and much more — to improve and add to financial data. And when run from cloud-based technology, these ERP tools can provide real-time data accessible from anywhere with an internet connection.

In business the adage of cash is king holds true for a reason. Without a healthy cash flow, your company’s profitability, growth and viability are threatened. It’s important to keep an eye on and understand your company’s cash position, how it relates to previous performance and where it might be in the future. Monitoring KPIs and other cash flow metrics plays a key role in understanding the financial health of your company. And financial management software provides the tools and technology to aggregate financial and other business information, then display that data in simple-to-understand dashboards. These visualizations give you the insight you need to keep an eye on the financial health of your business.