The most common weakness in mid-market reporting is not too little but too much: dashboards with thirty metrics that no one reads, while the three numbers that matter are missing. Good monthly controlling therefore starts with reduction — to the metrics that can trigger a decision.
This piece describes a lean set of metrics that has proven itself in supporting growing companies. It does not replace full corporate steering, but it creates the basis on which monthly decisions can reliably be made.
Four tests for every metric
Before a number reaches the first page of monthly reporting, it should pass four tests: does it support a decision? Is it available on time? Is it comparable across months? Does the recipient understand it without explanation? Metrics that fail belong in the appendix, not up front.
The monthly core set
In practice, four perspectives are enough to steer a company: earnings, liquidity, profitability and lead indicators. Each needs only a few clearly defined metrics.
- Earnings: revenue month and year to date, gross profit or contribution margin, operating result — each plan versus actual.
- Liquidity: current balance, the 13-week forecast and average days sales outstanding (DSO).
- Profitability: contribution margin per customer, product or project — not only at company level.
- Lead indicators: order intake or pipeline as an early signal for the coming months.
- revenue, month and cumulative, plan vs. actual
- gross profit / contribution margin and margin
- operating result (EBIT) vs. plan
- liquidity balance and 13-week forecast
- days sales outstanding (DSO) and overdue receivables
- contribution margin per customer / project (top and bottom)
- order intake / pipeline as a lead indicator
From value to decision
A metric only becomes useful through comparison: against plan, against the previous month and against the prior year. A margin of 22 percent means nothing on its own; against 26 percent a year earlier it is a signal to act. Every metric in the core set therefore needs a reference point and an owner.
A B2B media services provider (14 employees) kept revenue lists but did not know the profitability of individual projects. After introducing project-level contribution-margin accounting, the average contribution margin across some 35 projects rose from 19.5 to 24.2 percent over four months; the share of profitable projects increased from 68 to 91 percent. Figures from internal management data, released for publication.
What is deliberately left out
The core set deliberately omits anything not relevant to monthly decisions. Detailed analyses, balance-sheet ratios or special studies have their place — but in the appendix or the quarterly review, not in the monthly steering report. Fewer metrics delivered consistently beat an overloaded dashboard.
This article is based on Northmont Advisory's own consulting practice and deliberately contains no external statistics.