5 Key Metrics Every Small Business Should Be Tracking Monthly
Running a small business without keeping an eye on your numbers is a bit like setting off on a long road trip without checking how much fuel (or charge!) you’ve got – you might get where you’re going, but there’s a good chance you’ll break down somewhere along the way.
We’ve seen first-hand how powerful it can be when business owners get into the habit of tracking a few key numbers regularly. The good news? You don’t need an accounting degree or a giant spreadsheet. Just five simple metrics can tell you a lot about how you’re really doing; here’s what we recommend keeping an eye on every month.
1. Cash flow
Cash flow is the lifeblood of your business. It’s not about how much you’ve invoiced – it’s about how much actual cash is coming in and going out. Positive cash flow keeps the lights on and the wages paid. If you’re not looking at this at least once a month, you’re flying blind.
Tip: Look for patterns. Are there certain months when cash gets tight? Spotting these early gives you time to plan, not panic.
2. Gross profit margin
Gross profit margin tells you how much money you’re making after covering the direct costs of what you sell. In simple terms – if it costs you £10 to make something and you sell it for £20, your gross margin is £10.
If margins are shrinking, it could be a sign that costs are creeping up or prices need a rethink. Keeping an eye on this can stop problems snowballing.
3. Debtor days
How long does it take your customers to pay you? Debtor days measure the average time between sending an invoice and getting the money in the bank.
Long debtor days can strangle your cash flow – even if your sales look healthy on paper. Setting clear payment terms (and sticking to them) helps keep this number under control.
4. Monthly recurring revenue (MRR)
If you’ve got regular customers or service contracts, tracking your monthly recurring revenue is a game changer. It shows you how much reliable income you can expect month to month – the more predictable your income, the easier it is to plan ahead.
Not every business has MRR, but if yours does, make it a key part of your dashboard.
5. Net profit
This is the big one – how much money is actually left after everything is paid. Rent, salaries, supplies, tax, the lot. Your net profit tells you whether all the hard work is paying off.
It’s easy to get caught up in top-line sales numbers, but profit is where the real story lies. High sales with low profit margins can leave you working harder for less.
Keeping track of these five numbers doesn’t need to take hours – and the insight you get back is well worth the effort. Over time, you’ll start to spot trends, catch problems early, and make better decisions.
Talk to us
At Navigate, we help small businesses across Derbyshire and Yorkshire get a good handle on their finances – and we promise to do it without drowning you in jargon. If you'd like to learn more, get in touch on 01709 589 439 or book a call with our team.
