Setting goals and measuring performance

Goals are what drive the long-term performance of your business.

Agreeing clear targets, and measuring your progress over time with key performance indicators (KPIs), helps you understand exactly where the business is going.

But how does this kind of performance management work in practice?

Track your performance with KPIs

Tracking your goals with KPIs shows you where the company is hitting the mark and, just as importantly, where you need to do better. That puts real drive and motivation behind your overall strategy.

To make performance management work for your profits and productivity:

• Set targets and work to a long-term strategy. Define your key goals for sales, profit, growth, cashflow and so on, and make sure these targets are closely aligned with your wider strategic business plan, so you’re tracking the measures that matter.
• Track performance with real-time information. Connect a KPI reporting tool to your accounting software and monitor the key financial and non-financial measures. Use the dashboard to check your KPIs regularly, so you always have a clear, current view of performance.
• Motivate your team. Explain your key targets to the wider team and keep them involved in meeting these goals. Motivation and engagement tend to be higher when people can see what they’re working towards.

Choosing KPIs that matter

There’s no single right set of KPIs. The best ones are a handful of measures that tell you something useful about your own business. Depending on what you do, they might include:

• Gross margin: how much of each pound of sales is left after direct costs.
• Cash in the bank and cash forecast: whether you can meet what’s coming up.
• Debtor days: how quickly customers pay you.
• Revenue per customer or per job: whether you’re getting more value from the work you win.
• Sales pipeline or enquiries: an early sign of future income.
• Non-financial measures: for example customer satisfaction, repeat business or staff utilisation.

Whatever you choose, define each measure clearly and work it out the same way every time, so the trend means something.

Five or six well-chosen KPIs that you actually look at are worth far more than a dashboard full of numbers nobody reads.

Making it a habit

KPIs work best when reviewing them becomes routine. Set a regular slot, monthly for most businesses, with the key people in the room, to look at the numbers, compare them with your targets and agree what you’ll do about anything that’s off track.

Keep a short note of what you decided each time. Over a few months, you’ll see which actions made a difference and which didn’t, and that helps you set better targets.

Review the targets themselves once a year too. As the business changes, the measures that matter may change with it.

Talk to us about setting up a KPI dashboard

If you’re looking to track, monitor and improve your business performance, we can help. We’ll help you choose the right KPI reporting tool and get you in control of your key figures. Get in touch to get started.

Call us on 020 7164 0225, send us a WhatsApp message or email us at info@ibandco.co.uk.

You can also read about our management accounts service.

First published 10 February 2026. Tax content checked on 9 October 2026. This article reflects the rules at the date it was first published. Where something has changed since, we’ve added an update note. Rules and rates change, so please check with us before acting.