Keeping everything in check is key to a healthy business

The modern day business has so many moving parts, which is why it’s hard to keep track of everything.
Blue Bean has been designed to take care of the financial parts so you can focus more time on the operational aspect.
A healthy cash flow is fundamental to a healthy business. To promote a healthy cash flow, you need 4 things to be aligned. Your business must be:
  • Profitable
  • Liquid
  • Solvent
  • Efficient
These generally go without saying as they are considered no-brainers. Despite that, it’s hard to see these numbers 24/7 without some fancy reporting framework or custom dashboard.

Profitability

Maintaining high profitability is easier said than done. Even though, this KPI is the foundation of all businesses and you have to do all you can to maintain consistent positive margins while keeping debtors as low as practical to create profitability and promote long term growth.
Key metrics to watch:

Liquidity

Cash flow is king, as they say. Even the most successful business will fail if they run out of cash. Make sure debtors pay on time and keep your debt ratio below 0.20 so you can service bills on time with cash to spare.
Key metrics to watch:

Solvency

Every year Directors must sign a declaration that their business is solvent. And for good reason, being solvent is akin to saving for a raining day. You must be able to service all payments. Keep liabilities in check to lay the foundation for growth off the back of a strong balance sheet.
Key metrics to watch:

Operational Efficiency

This is all about high performance tuning. Finely tune your operation by building strong cash reserves and aim to get your Return on Capital rate above the long term cash rate.
Key metrics to watch:

In summary

Keeping an eye on all these KPIs and keeping them in the healthy zone is a sure fire way to thrive, not just survive, in any environment.
I encourage you to create a report or a dashboard that gives you these figures whenever you need them. If you don’t have the time or resources to make that happen then sign up for Blue Bean today and you’ll see your metrics within a few minutes.

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