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What are KPIs?
KPIs, or Key Performance Indicators, are metrics that enable you to track, analyse, and report on the performance of your business.
In Fathom, you can track lagging indicators to better understand current performance and leading indicators to gain insight into future business performance.
Examples:
Lagging indicators may include:
Revenue Growth – a measure of the business’s growth in sales.
Breakeven Margin of Safety – the amount by which revenue can drop before losses begin to be incurred.
Cash Conversion Cycle – a measure of how quickly cash is recovered. The time between purchasing raw materials and collecting accounts receivable.
Expense-to-Revenue Ratio – a measure of how efficiently the business is conducting its operations.
Accounts Receivable Days and Accounts Payable Days – how quickly a business collects amounts due from customers or pays its creditors. An indicator of cash flow performance.
Leading indicators may include:
New Orders/Leads – indicate the direction of sales and future revenues.
New Hires – indicates an eventual increase in sales or efficiency once their training is complete.
Net Promoter Score (NPS) – gives an idea of the potential lead pipeline and eventual sales.
Marketing Spend – additional spending should result in increased sales.
Fixed Asset values – increases in fixed assets could indicate investments in the business that will lead to growth.
How to set up KPIs in Fathom
You can make changes to the KPIs you’re tracking in Fathom from a Fathom Pro company’s Settings at any time.
Access the Settings by selecting the Cog/Gear icon for the company from the My Companies page. If you have several companies imported into Fathom, you’ll need to hover over a company to reveal the Cog/Gear icon.
You'll see KPIs on the left sidebar of the Settings.
We suggest the following workflow to set up KPIs in Fathom:
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📝 Note: Your company or group KPI Settings do not affect the Insights Dashboard.
💡Smart Tip: If you're an Advisor or Admin-level user on a Fathom account, you can follow and complete the KPIs Checklist to choose and set up your KPIs. Launch the KPIs Checklist
Types of KPIs
In the KPI Settings, you'll see the Default KPIs available to all companies. You can also add:
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Default KPIs
Fathom calculates 50+ standard financial KPIs by default for Fathom Pro companies.
To ensure you're viewing only the Default KPIs in the KPI Settings:
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Remember to Clear filters when you want to see the other KPI types listed. If you want to know more about a specific Default KPI and how it’s calculated, you can view our KPI Glossary.
Library KPIs
The KPI Library allows KPIs to be shared across companies, so you can avoid re-creating existing custom KPIs. It also enables you to add custom KPIs to a consolidated group or benchmark group.
Library KPIs include:
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To view the KPIs in your KPI Library:
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You can select any KPIs you want to add to your company. Some Library KPIs may require you to import or add non-financial data to Fathom.
📝 Note: Only Admin-level users can add KPI to the KPI Library or edit KPIs in the KPI Library.
Custom KPIs
Custom KPIs can be created by you or a member of your Fathom organisation.
To create a custom KPI:
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There are four types of custom KPIs:
Measure metrics or numbers outside of the financials.
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Track any account or heading from your Chart of Accounts as a key metric in Fathom. This can help you closely monitor key income or expense accounts.
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Track financial KPIs for your divisions (e.g. tracking categories, classes, locations, etc.).
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Create bespoke formulas to track specific metrics for your business.
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Non-financial KPIs
Non-financial KPIs can be used to track data outside of the financial statements. They can also be used as variables in Formula KPIs.
Non-financial KPIs often provide context for financial performance, and many leading indicators of financial performance require non-financial data.
Examples: Non-financial KPIs can include:
Headcount
Number of Projects
Net Promoter Score (NPS) or Customer Satisfaction Score (CSAT)
New Orders/Leads/Customers
Units sold
Headcount and Number of Projects can be used to calculate Average Revenue per Employee or Average Revenue per Project in Formula KPIs.
New Orders/Leads/Customers, NPS Score, and CSAT Score can be indicators of potential future revenue performance. If a business tracks units sold per product, it can better understand which products are generating revenue.
For more information about creating non-financial KPIs and importing non-financial data into Fathom, see our Non-financial KPIs article.
Account Watch KPIs
Creating an Account Watch KPI will make a key account or heading’s results more visible and accessible by pulling the balance into the Analysis tools as a KPI.
If you only want the heading or account’s results to show up in a Pro report, then you do not need to create an Account Watch KPI.
Example: A business is investing more in online marketing to generate more revenue. The business creates an Account Watch KPI for its ‘Online Marketing’ account on the Profit & Loss so it can closely monitor and track that account.
When creating an Account Watch KPI, you will select:
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Divisional KPIs
Divisions include:
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Divisional KPIs are one way to track divisional data in Fathom. You can also track divisional data in Account Watch or Formula KPIs, the Analysis tools, and Pro Reports.
Example: A retail store has multiple locations. In their source accounting system, each location is a separate division (e.g. tracking category, class/location, cost centre, etc.).
They opened one of the locations recently, so they created Divisional KPIs to track that location’s Operating Profit Growth and Expense-to-Revenue ratio. This allows them to monitor that location’s performance more closely.
For more information about Divisional KPIs and all the ways to track divisional data in KPIs, please see our ‘Use Divisions in KPIs’ article.
Formula KPIs
For formula KPIs, you can define the KPI calculation using a formula builder.
Select from a range of different variables when building a Formula KPI:
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Example: A car dealership wants to track the average sales revenue per salesperson.
They have created a Non-financial KPI for the ‘Number of Salespeople.’
They have a ‘Sales Revenue’ heading on their Chart of Accounts with several sales accounts under it.
They create a Formula KPI with those variables:
When creating a Formula KPI, you’ll:
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📝 Note: Default KPIs can be used as variables in Formula KPIs in an individual company. However, Formula KPIs with Default KPIs as variables cannot be added to the KPI Library.
Instead, you must re-create the Default KPI as a custom Formula KPI. Then, use that new custom Formula KPI as a variable in your original Formula KPI. You will then be able to add the KPI to the KPI Library.
Choose which KPIs are active
Active KPIs show up in the KPI Summary, KPI Explorer, and Trend tools in the Analysis tools and Pro Reports.
Inactive KPIs can still be:
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Fathom automatically activates certain KPIs for every business by default. We encourage you to tailor your active KPIs to your specific business needs.
You can have up to 60 active KPIs for a company or group, but we recommend starting with about 10 active KPIs to focus on the metrics that matter most to your business. More active KPIs will make those Analysis tools more overwhelming.
To make a KPI active or inactive:
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Your changes will automatically save.
Set KPI importance levels
Importance levels are displayed in the KPI Summary and KPI Explorer tools, along with their corresponding reporting charts.
As you review which KPIs are or are not meeting targets, the importance levels remind you of which KPIs are most critical to the business’s performance. They provide helpful context as you analyse and discuss results.
You can set importance levels for active KPIs:
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Your changes will automatically save.
Organise your KPIs
You can use the Search, Sort, and Filters options at the top of the KPI settings to quickly identify and find certain KPIs.
KPI categories
KPI categories help you organise your KPIs and, like importance levels, provide additional context as you review results in the KPI Summary and KPI Explorer tools.
When you create or edit custom KPIs, you can choose the KPI category or create a new category. You cannot change the categories for Default KPIs. It is only possible to change the categories for Library KPIs from within the KPI Library.
There are two ways to change a custom KPI’s category after it has been created:
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Your changes will automatically save.
Reorder KPIs
You can re-order KPIs by dragging and dropping them.
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Your changes will automatically save.
Edit KPIs
You can edit custom KPIs at any time:
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Library KPIs can only be edited by Admin-level users. It is not possible to edit the Default KPIs. If you want to use a different formula for a Default KPI calculation, you can re-create it as a custom Formula KPI and use your own formula.
Delete KPIs from a company
Deleting a KPI will remove it from the Analysis tools, including the Analysis tools charts in past reports. If you want to retain KPI results in past reports, you can download those reports to PDF before deleting the KPI.
If you simply want the KPI removed from the Analysis tools, then you can make the KPI inactive.
To delete a KPI from a company:
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For KPIs in a consolidated group, ensure the KPI status is set to inactive for all underlying companies within the group and sync the group with the underlying companies. This will remove the KPI from the group.
Frequently Asked Questions
Which KPIs do you recommend I track for my business?
If you’re just getting started with tracking KPIs and understanding your business’s financial performance, we recommend beginning with some of Fathom’s Default KPIs.
The KPIs you select are not set in stone. You can change your selections and create custom KPIs at any time.
When choosing KPIs, keep in mind the business’s main strategic goals and which KPIs are the best measure of progress towards those goals for your business.
There will likely be a period during which you refine your KPI selection through research and understanding which drivers have the greatest impact on the business’s strategic goals. Questions asked by stakeholders when you go over the analysis or deliver reports can also help you determine which metrics people are most interested in or concerned about.
For non-financial KPIs, it’s also good to think about which metrics you can have updated reliably by yourself or other stakeholders. You may get more interest and buy-in from stakeholders as you share your findings from Fathom, and they may be able to help you keep non-financial results up to date.
For more general and industry KPI recommendations, you can also look at the following resources:
This links to several KPI resources, including some industry ones
Can I copy KPIs from another company?
You can copy KPIs and other settings from other companies in your Fathom organisation. Learn more from our ‘Can I copy settings between companies and groups?’ article.
How do I add KPIs to a consolidated group?
Custom KPIs must be:
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They will then roll up to the consolidated group. Learn more about this process from our ‘Consolidate KPIs’ article.
Next Steps
Congratulations on setting up and organising your KPIs!
Any decisions you made in 'KPIs' can be changed at any time, if needed. Continue the 'Get Started Workflow' and finish setting up your company for analysis, reporting, and forecasting by choosing from one of the next steps below:
What you want to do: | Next step in the setup process: |
Happy with your chosen KPIs and ready to set targets for your company? | |
Good with your targets and ready to set up alerts? |
Learn more