NetSuite, as a comprehensive cloud-based business management suite, offers robust tools for monitoring Key Performance Indicators (KPIs). With the ability to customize and track a wide array of KPIs, NetSuite helps businesses stay on top of their performance metrics. This article highlights the top KPIs every NetSuite user should monitor to ensure their business is on the path to success.
1. Sales Growth
Sales growth is a fundamental KPI that measures the increase in sales revenue over a specific period. It’s a direct indicator of business expansion and market penetration. By tracking sales growth in NetSuite, businesses can quickly assess the effectiveness of their sales strategies and make data-driven decisions to boost revenue.
How to Monitor in NetSuite: Use the Sales Orders and Revenue reports in NetSuite to track sales trends over time. Set up a custom KPI to monitor sales growth on your dashboard, and compare it against previous periods to identify trends.
2. Gross Profit Margin
Gross profit margin is the percentage of revenue that exceeds the cost of goods sold (COGS). It’s a critical measure of a company’s financial health and efficiency. A high gross profit margin indicates that a company is managing its production costs well and maintaining profitability.
How to Monitor in NetSuite: NetSuite allows you to calculate and monitor gross profit margin through its financial reporting tools. Customize your Income Statement to include gross profit as a KPI and track it regularly.
3. Customer Acquisition Cost (CAC)
Customer Acquisition Cost is the cost associated with acquiring a new customer, including marketing and sales expenses. Monitoring CAC helps businesses evaluate the efficiency of their customer acquisition efforts and ensure that they’re not overspending to bring in new customers.
How to Monitor in NetSuite: Track your marketing and sales expenses through NetSuite’s financial modules and compare them against the number of new customers acquired during the same period. This will give you a clear picture of your CAC.
4. Inventory Turnover
Inventory turnover measures how often inventory is sold and replaced over a period. It’s a vital KPI for businesses that manage physical products, as it indicates the efficiency of inventory management and sales performance.
How to Monitor in NetSuite: Use NetSuite’s Inventory Management module to track inventory levels and sales data. Set up a KPI to monitor inventory turnover on your dashboard, ensuring that your inventory levels are optimized.
5. Net Promoter Score (NPS)
Net Promoter Score is a metric that gauges customer loyalty and satisfaction by asking customers how likely they are to recommend your product or service to others. A high NPS indicates strong customer satisfaction, which is essential for long-term business success.
How to Monitor in NetSuite: While NPS is typically gathered through surveys, you can integrate survey results into NetSuite and track NPS as a KPI. Regularly review NPS scores to assess customer sentiment and identify areas for improvement.
6. Operating Cash Flow
Operating cash flow measures the cash generated by a company’s regular operating activities. It’s a crucial indicator of financial stability and liquidity, ensuring that a business can meet its short-term obligations.
How to Monitor in NetSuite: NetSuite’s Cash Flow Statement provides detailed insights into your operating cash flow. Set up this KPI on your financial dashboard to monitor cash flow trends and ensure your business remains financially healthy.
7. Return on Investment (ROI)
Return on Investment is a performance measure used to evaluate the efficiency of an investment. Monitoring ROI helps businesses understand the profitability of their investments, whether in marketing, product development, or other areas.
How to Monitor in NetSuite: Track ROI by comparing the gains from an investment to the costs associated with it. NetSuite’s financial reporting tools allow you to calculate and monitor ROI across various initiatives.
Monitoring these KPIs in NetSuite can provide a comprehensive view of your business’s performance and help you make informed decisions. By focusing on these critical indicators, you can ensure that your business is not only on track but also poised for growth and success.