Financial KPIs

Luke Templin
April 08, 2023

The Mind 🧠 of a CFO

Read time: 2:14 minutes

Welcome to The Mind of a CFO newsletter. The newsletter is designed to help entrepreneurs grow in business 📈, mind 🧠, body 💪, and spirit🧘.

We will give our CFO's take on a topic to grow your business profitably each month.

In addition, we will provide you with a few things we are listening to 👂, reading📚, or watching 👀 that we believe will help grow an entrepreneur.

Disclaimer: Some of the links below support me in writing this newsletter, and some give you a deal too.

CFO’s Take - Financial KPIs

There are two types of KPIs: leading KPIs and lagging KPIs. Leading KPIs help to predict future performance, while lagging KPIs measure past performance.

In most cases, financial KPIs are lagging indicators.

Measuring past performance is an instrumental piece in determining how your decisions have been impacting your business - it’s similar to keeping score during a game. They allow you to narrow your focus and pinpoint the exact areas where you need to improve.

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Why Track Financial KPIs?

Financial KPIs (key performance indicators) provide a snapshot of the past financial performance of your business. They help identify areas of improvement and provide you with the information you need to make crucial business decisions.

But in order to do that, you have to track the right financial KPIs. These numbers will tie in with your business goals so that you can measure progress and make the necessary adjustments should you need to course correct.

Before we begin, monitoring your short-term cash flow is one of the most impactful financial measurements for your business. It allows you to make more informed decisions in real-time.

Prioritize Short-Term Cash Flow

Cash is king in the business world, so tracking collections and outflows is essential.

Considering most financial KPIs are lagging indicators, short-term cash flow reporting is a great complement as it is more of a leading indicator from a financial perspective.

At a2advisers.com, we recommend keeping tabs on your cash collections and outflows weekly.

To find the information you need for tracking your cash flows, look at these items regularly:

Bank accounts
Outstanding invoices (aka accounts receivable aging)
Outstanding bills (aka accounts payable aging)

We use FinDaily.io. After connecting your bank and accounting, you can build a custom email based on your business’s needs. You’ll be able to see up-to-date numbers automatically from the comfort of your inbox.

With a strong pulse on cash collections and outflows, you’ll have a good picture of your business’s financial position and can dive deeper into your financial KPIs.

Click here to continue reading.

Brain 🧠 Food

📈📚 Create an employee idea generation machine in your business to protect it from the competition. Kim Scott (author of Radical Candor) used this at Google. Click here to read.

Over The Last 2 Weeks:
1. Saudi Arabia considers accepting Chinese Yuan for oil sales
2. China and France complete first LNG trade using Yuan
3. Russia considers using Chinese Yuan as reserve currency
4. Saudi Arabia partners with China to build refinery for 83.7 billion… twitter.com/i/web/status/1…
— The Kobeissi Letter (@KobeissiLetter)
6:36 PM • Mar 29, 2023

📚👀📉 This one is on the negative side, but you need to be aware of it. The US dollar is under attack. It has been for years. The above Tweet is the most recent siege on the US dollar.

This eye-opening documentary on the Changing World Order will explain it better than I ever could. Click here to watch.

The takeaway here is something I talk about often and struggle with myself. You need to live in the present. We have watched countless owners build for the future, but some never realize that future. Whether it be an economic downturn, health issues, etc.

“Realize deeply that the present moment is all you have. Make the NOW the primary focus of your life.” Eckhart Tolle, The Power of Now: A Guide to Spiritual Enlightenment

📈📚 How to write a cold email like a pro:

You're one cold email away from changing your life.
I've been able to interview legends like @JamesClear, @herfirst100K, @Codie_Sanchez, and @sivers on my podcast – and it's all thanks to cold email.
Steal my proven cold email formula: 🧵
— Jay Clouse (@jayclouse)
8:42 PM • Oct 30, 2022

Thanks for reading, Luke Templin!

P.S. There are two ways to work with Luke to grow your business profitably.

Virtual CFO Cohort for service-based entrepreneurs with $250k - $1 million revenue.
Fractional CFO for service-based entrepreneurs with over $1M in revenue.