Regain control: 5 key numbers your company should track monthly

Running a business is about more than passion and determination – it also requires solid financial management. Many small and medium-sized businesses struggle to balance creativity and control, especially when there are numerous projects and tight deadlines.

The solution lies in focusing on what truly matters: Key financial numbers that provide an overview and lay the foundation for smart economic decisions.

In this article, we’ll guide you through five key financial numbers that give you better insights and help you prioritise what creates value in your business. 

1. Cash flow, 2. Project margin, 3. Billable rate, 4. Overhead cost per employee, 5. Outstanding invoices

1. Cash flow – keeping the business afloat

Cash flow might be one of the more obvious key numbers, but it’s also one of the most critical. This figure shows the difference between incoming and outgoing payments during a given period. By closely monitoring cash flow, you get a clear overview of how much money is actually available to cover ongoing expenses or invest in the business.

Why it matters:

Without control of cash flow, even profitable businesses risk running into liquidity issues. 

How to stay on top of it:

• Conduct weekly or monthly cash flow analyses.
• Identify periods with low cash flow and set aside a buffer.
• Use digital tools to gain real-time insights and create forecasts.

Want to learn more about how to ensure profitable projects? Download our free guide to improving project profitability for practical tips and strategies.

2. Project margin – ensuring projects contribute to the bottom line

The project margin shows how much of the revenue remains after covering all costs. It’s calculated by subtracting costs from revenue and dividing the difference by revenue.

Why it matters:

The project margin indicates how profitable your projects are and how much actually contributes to the company’s bottom line after all expenses are paid. It also provides insights into how well you control costs and improve efficiency in project work.

How to stay on top of it:

• Create a budget for each project and update it regularly with actual figures.
• Compare actual costs and revenues with initial estimates to identify discrepancies.
• Monitor how margins change throughout the project. Both incurred and planned costs, as well as expected or booked revenues, can affect the numbers.

3. Billable rate – turning time into revenue

The billable rate measures the percentage of billable hours that are actually invoiced to clients. This key number provides a clear indication of how effectively your team uses its time on revenue-generating work.

Why it matters:

A low billable rate can indicate inefficiency – meaning time is spent on tasks that don’t generate revenue. By monitoring this number, you can identify areas where the team’s time can be used more effectively.

How to stay on top of it:

• Create weekly reports that highlight the difference between billable and non-billable hours (with Milient Project Flow, these reports can be generated automatically).
• Analyse trends over time. If you see many hours not being invoiced, it could indicate inefficiencies that can be addressed through better planning or prioritisation. 

Dive deeper into how to improve billable rates in our blog post: 4 practical methods for measuring billable rates.

4. Overhead cost per employee

Overhead cost per employee refers to fixed costs that aren’t tied to a specific project. This includes expenses like IT equipment, office rent, and administrative costs, distributed across all projects.

Why it matters:

Overhead costs can represent a significant portion of your business’s total expenses. Keeping these under control helps identify inefficiencies, cut unnecessary expenses, and optimise operations to ensure profitability.

How to stay on top of it:

• Calculate total overhead costs and divide them by the number of employees to get a realistic average.
• Update the calculation regularly, especially during major changes in your business structure or expenses.

5. Outstanding invoices – tracking where money gets stuck

Outstanding invoices show the total amount of unpaid invoices from your clients. This key number provides a clear overview of how much money your business is owed and how quickly clients pay for your services.

Why it matters:

Outstanding invoices directly affect cash flow. If clients take a long time to pay, it can cause liquidity issues, even if your projects are profitable. Monitoring this number regularly helps you collect payments faster and identify trends – such as which clients or periods often lead to delays.

How to stay on top of it:

• Use an invoicing system that provides a clear overview of outstanding invoices and due dates.
• Track how long it takes for clients to pay (average credit time).
• Review reports regularly to identify patterns, such as specific clients or industries being more prone to late payments.
• Follow up on invoices shortly before or after they’re due to ensure prompt payment.

Regularly tracking outstanding invoices not only improves cash flow but also allows you to refine payment processes to reduce the risk of future delays. Read more in our blog post aboutimplementing efficient invoicing procedures.