Saturday, September 26, 2009

What to track, and how (Kramers part 4)

"Spend your money on what causes sales," says Kraig Kramers. Figure out what is the driver, and then focus on that.

He suggests you use a 12-month forecaster: set goals, then do what you can to make sure actual results match the forecast. This process lets you know when you're diverging, and helps you figure out what tactics work best to get you back to projections.

* What causes sales
* Bookings, billings, collections, backlog
* Headcount and expenses
* Gross profits, in dollars and by percentages
* Pretax earnings

How to track cash, credit and asset management
- actual cash availability
- Line of credit Level and Limits
- Receivables DSO > 90
- Inventory Earn-n-Turn

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