15 most important financial KPIs for SMEs: Formulas & practical tips

The 15 most important financial KPIs for SMEs: How to really manage your company

Lukas Roth

November 27, 2025

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You know the feeling: At the end of the month, you look at your bank account and ask yourself where all the money has gone. Or you are wondering why liquidity is becoming scarce despite good sales. Many medium-sized entrepreneurs rely on their good feeling and a few basic figures such as turnover or profit. But that's exactly where the problem lies: Without the right financial KPIs, you're navigating your company blindly.

The good news is: You don't need endless reports or expensive advisors to get your finances under control. With 15 well-selected key figures, you gain the transparency you need to make better decisions. KPIs are not a luxury for corporations, but a management tool for every SME. They help you identify risks early on, measure productivity and make better use of growth opportunities.

In this guide, you'll learn the 15 most important financial KPIs for SMEs. For each key figure, you'll learn what it means, how to calculate it, and why it's relevant to your company. We will also show you which KPIs are particularly important for various industries, whether you run an agency, a craft business or a trading company.

Why SMEs often underestimate financial KPIs

“KPIs? Only big companies work with that. We in SMEs don't have time to keep an eye on something like that all the time.” You hear this quote from the SME sector surprisingly often. Many small and medium-sized companies see key figures as a corporate tool that is too complex and time-consuming. The exact opposite is the case: SMEs in particular benefit from clear financial figures because they often work with scarcer resources and cannot afford expensive mistakes.

The problem usually starts with perception. Many entrepreneurs believe that their monthly bookkeeping and annual balance sheet would be sufficient. But these figures come too late and are too static. When you notice that liquidity is becoming scarce, it is often too late to take timely countermeasures. Financial KPIs, on the other hand, give you early warning signals and enable proactive action instead of reactive crisis management.

Another reason for reluctance is fear of complexity. Excel lists with dozens of key figures are a deterrent. But here's the mistake: You don't have to track all KPIs at once. Start with a few relevant key figures and gradually expand your system. It is better to consistently pursue two to three KPIs than maintain 20 half-heartedly. If you want to know how to start controlling systematically, read our article about Controlling in 5 steps.

“KPIs? Only large companies work with this — we in SMEs have no time to keep an eye on something like that all the time.” — typical feedback from the SME sector

What many people don't know: According to studies, around 70% of small and medium-sized enterprises only use basic financial figures for management^[4]. At the same time, this means that enormous potential remains untapped. Companies that work systematically with financial KPIs make better investment decisions, optimize their cost structure and identify profitable business areas more precisely.

What are KPIs and why are they so important?

KPI stands for Key Performance Indicator, in German: Performance Indicator. At their core, KPIs are measurable values that show how successfully your company is achieving specific goals. They translate complex business processes into understandable figures and make your company performance measurable and comparable.

Financial KPIs focus specifically on the financial health of your company. They answer critical questions: How is your liquidity developing? How profitable are you really working? How efficiently are you using your capital? Which customers or products are the most profitable? You cannot answer these questions with pure sales figures. You need differentiated indicators that provide different perspectives on your business.

The importance of financial KPIs lies in four central functions. First, they offer control: With clear indicators, you know where you stand and whether you're on track. Second, they serve as an early warning system: critical developments become visible before they become real problems. Thirdly, they enable better decisions: Instead of feeling good, you rely on data. Fourthly, they create transparency: Your entire team understands what is important and can contribute to it in a targeted manner.

An often underestimated advantage: KPIs also help you with bank meetings, investor presentations or company succession. Anyone who knows and is able to present their key figures appears professional and gains trust. This can make the decisive difference when it comes to credit negotiations or sales calls.

The 15 most important financial KPIs for SMEs in detail

Now we're getting to the heart of it: The 15 financial KPIs that you should know and use as an SME. For each key figure, you'll find out what it means, why it's relevant, how to calculate it, and for which industries it's particularly important.

1. Sales growth

What is that? Sales growth shows the percentage change in your turnover over a certain period of time, usually compared to the previous year or previous quarter.

Why relevant? Growth is an indicator of market acceptance of your products or services. Stagnating or falling sales may indicate market changes, increased competition, or product problems. In 2023, German SMEs showed moderate growth, with an average increase in turnover of around 5% compared to the previous year^[4].

Formula: ((Sales current period - sales previous year period) /Sales previous year period) × 100

Particularly important for whom? All industries, but especially start-ups and growth-oriented companies. Also important for seasonal businesses to distinguish trends from normal fluctuations.

2nd EBIT margin

What is that? The EBIT margin (Earnings Before Interest and Taxes) shows how much operating profit remains per euro of revenue before interest and taxes are deducted.

Why relevant? This key figure shows the operating profitability of your core business, regardless of the financing structure and tax situation. It enables comparisons between companies and over time periods.

Formula: (EBIT/ revenue) × 100

Particularly important for whom? All industries. Particularly valuable for manufacturing companies and service providers to compare the profitability of different business areas.

3rd cash conversion cycle

What is that? The cash conversion cycle measures how long your capital is tied up in the operating cycle, from the purchase of goods to receipt of payment.

Why relevant? This key figure is crucial for your liquidity planning. A short cycle means you'll have your money back faster. A long cycle can lead to liquidity bottlenecks, even if you're working profitably^[1].

Formula: Accounts receivable period + storage period - vendor period (all in days)

Particularly important for whom? Trade, production and all companies with inventory. Particularly critical for fast-growing companies that need to keep their liquidity under control.

4. Liquidity ratio

What is that? The liquidity ratio shows the relationship between current assets and current liabilities.

Why relevant? This key figure shows whether you can meet your short-term payment obligations. A value below 1 indicates liquidity problems. According to the KfW SME Panel, 11% of SMEs already rate their liquidity as critical^[7].

Formula: Current assets/ current liabilities

Particularly important for whom? All industries. Particularly critical for companies with long payment terms or seasonal fluctuations.

5. Receivable period (Days Sales Outstanding)

What is that? The average number of days until your customers pay their bills

Why relevant? Long payment terms tie up liquidity and increase your default risk. Every day that you get your money faster directly improves your liquidity situation.

Formula: (receivables from deliveries and services/turnover) × 365 days

Particularly important for whom? Service providers, agencies and B2B companies with long payment terms. Particularly relevant for companies that work with larger customers.

6. Creditor period (Days Payables Outstanding)

What is that? The average number of days until you pay your vendor invoices.

Why relevant? Longer payment terms improve your liquidity, but delaying them too long can damage supplier relationships and cost discounts. The right balance is crucial.

Formula: (Liabilities from deliveries and services/purchase of goods) × 365 days

Particularly important for whom? Trade and production. Particularly valuable for companies that want to optimize their working capital ratio.

7th break-even point

What is that? The point at which your income covers exactly your costs. From this turnover, you work profitably.

Why relevant? This key figure shows you how much turnover you need to make at least to avoid slipping into a losing zone. Particularly important for pricing decisions, capacity planning and risk assessments.

Formula: Fixed costs/ (selling price per unit - variable costs per unit)

Particularly important for whom? All industries. Particularly relevant for start-ups, new business areas or for planned investments.

8. Customer Acquisition Cost (CAC)

What is that? The average cost of acquiring a new customer, including marketing and sales.

Why relevant? If your acquisition costs are higher than customer value, you lose money with every new customer. This key figure is crucial for the scalability of your business model^[3].

Formula: Total sales and marketing costs/number of new customers acquired

Particularly important for whom? agencies, SaaS companies, start-ups and all companies with an active customer acquisition process.

9. Customer Lifetime Value (CLV)

What is that? The estimated total value that a customer generates for your company over the entire business relationship.

Why relevant? This key figure shows how much you can invest in customer acquisition. The rule of thumb is: CLV should be at least three times as high as CAC. How to ensure customer acquisition is profitable^[3].

Formula: Average revenue per customer × average customer relationship length × large margin

Particularly important for whom? Agencies, subscription businesses, service providers with recurring sales. Decisive for long-term growth strategies.

10. Order back/workload

What is that? The value of all orders confirmed but not yet completed, often in relation to production capacity.

Why relevant? This key figure gives you planning security and shows how well your pipeline is filled. A falling order backlog is an early warning sign of future sales problems.

Formula: Total open orders/average monthly turnover (results in range in months)

Particularly important for whom? Crafts, production, project-based service providers. Particularly valuable for companies with longer project durations.

11. Personnel cost ratio/turnover per employee

What is that? The share of personnel costs in total turnover or the average turnover generated by each employee.

Why relevant? Staff is the biggest cost factor for most SMEs. These metrics show whether your team is working productively and whether your cost structure is competitive.

Personnel cost ratio formula: (Total personnel costs/turnover) × 100

Sales per employee formula: Total turnover/ number of employees

Particularly important for whom? Service providers, agencies, crafts. Particularly relevant for labor-intensive industries, where productivity directly influences margins.

12. large margin (large margin)

What is that? The percentage of turnover that remains after deduction of direct costs (use of goods, direct production costs).

Why relevant? The gross margin shows how profitable your core business is. It is decisive for pricing decisions and shows whether rising purchase prices or discounts are jeopardizing your profitability^[2].

Formula: ((turnover - use of goods) /turnover) × 100

Particularly important for whom? Trade, production, e-commerce. Particularly critical for companies with low margins and high competitive pressure.

13. equity ratio

What is that? The share of equity in total assets shows the financial stability and independence of your company.

Why relevant? A high equity ratio makes you more crisis-resistant and improves your creditworthiness. Banks and investors are looking closely at this key figure. In German SMEs, a ratio of over 30% is considered solid^[5].

Formula: (equity/balance sheet total) × 100

Particularly important for whom? All industries. Particularly relevant for capital-intensive companies, growth companies and in financing negotiations.

14. working capital ratio

What is that? The ratio of current assets to current liabilities shows your operating liquidity.

Why relevant? This key figure shows how well you can finance your operating business. A negative value means that you must finance short-term liabilities with long-term capital, which is expensive and risky.

Formula: Current assets - current liabilities

Particularly important for whom? Trade, production, all companies with warehousing. Particularly critical for fast-growing companies.

15. churn rate (customer churn)

What is that? The percentage of customers who leave in a given period of time or do not renew their contracts.

Why relevant? Acquiring new customers is expensive. If you lose a lot of existing customers at the same time, you're running on a hamster wheel. A low churn rate is crucial for profitable growth^[3].

Formula: (number of customers emigrated in the period/ number of customers at the beginning of the period) × 100

Particularly important for whom? Subscription transactions, SaaS, service providers with existing customers, agencies. Particularly critical for business models with recurring sales.

Industry-specific KPI prioritization

Not all KPIs are equally important for every company. Depending on your industry and business model, you should set different priorities. Here are the most important KPI combinations for different types of businesses.

Agencies and Start-Ups Should focus on CAC, CLV, churn rate, and revenue per employee. These key figures show whether your growth is sustainably profitable. The personnel cost ratio is also critical, as personnel are usually the biggest cost factor. So keep an eye on the debtor period, because agencies in particular often struggle with long payment terms.

Craftsmanship and production Benefit in particular from the personnel cost ratio, order backlog, cash conversion cycle and equity ratio. The order backlog gives you planning security for your capacities. The Cash Conversion Cycle shows how quickly you can get back your capital tied up in Materials and Work. The equity ratio is important for investments in machinery and equipment.

Retailers and Service Providers Should focus on liquidity, working capital, gross margin and cash conversion cycle. The gross margin immediately shows whether your purchasing conditions and prices are right. Working capital is crucial for financing your inventory. The Liquidity Figures help you avoid bottlenecks that can quickly threaten your existence in trading.

The important thing is: These recommendations are starting points, not rigid guidelines. Analyze your business model and identify the levers that have the biggest impact in your company. If you want to learn more about how controlling can protect against insolvencies, we recommend our article about Controlling to avoid insolvency.

How to get started with financial KPIs in practice

You now know the 15 KPIs. But how do you actually start? The biggest mistake would be trying to implement all key figures at the same time. These leads to excessive demands and frustrated task hooks. Instead, we recommend a structured three-phase approach.

Stage 1: Laying the Basis — Start with three to four core KPIs that are most critical to your business For most SMEs, this includes liquidity (current ratio), revenue development and gross margin. Set up simple monthly reporting, even if it's just an Excel spreadsheet at first. Rhythm is important, not perfection.

Stage 2: Deepen and Refine — If your basic reporting is stable for three months, add more KPIs. Add metrics that address your specific challenges. Are you struggling with liquidity? Add the receivables period and cash conversion cycle. Do you want to grow more profitably? Add CAC and CLV. Start with simple benchmarks too: How do your KPIs develop over time? Where do you stand in an industry comparison?

Stage 3: Automate and Integrate — Once you understand which KPIs are really helping you, it's worth investing in automation. Modern tools can calculate financial KPIs directly from your accounting and relieve you of the tedious manual work. This not only saves time, but also dramatically reduces errors. Automated forecasting tools demonstrably increase efficiency by up to 30%^[5].

A handy tip: Create a one-page dashboard with your most important KPIs. Visualizations such as simple charts make trends immediately visible. Share this dashboard with your team and use it for regular meetings. In this way, you create transparency and everyone is working towards the same goals.

Modern tools make KPI tracking easy

The good news: You don't have to calculate KPIs manually in Excel. Modern Controlling Software Automates the Entire Process and Makes Professional Financial Controlling Accessible Even to Small Companies. The automatic calculation of KPIs through financial software can reduce expenses by up to 30% and increase efficiency by 20%^[4].

Intelligent tools automatically import your accounting data, calculate all relevant key figures and present them in clear dashboards. Instead of spending hours collecting data and formulas, you focus on interpreting and making decisions. Modern Solutions also offer benchmarking features so you can compare your performance with similar companies.

AI-based analyses are particularly valuable. Algorithms recognize patterns and trends in your data that you would manually overlook. They proactively warn you of potential liquidity bottlenecks or identify profitable areas of business that you should expand. What used to require expensive consultants and financial experts is now carried out by intelligent software. If you're wondering how secure such AI-based solutions are, you'll find all the answers in our article about Data security in AI controlling.

Switching to professional tools is easier than expected. Cloud-based solutions require no IT expertise or complicated installation. You can often start within minutes and the software grows with your requirements. Many providers also offer free trial periods, so you can try out whether the solution is right for you without risk.

KPIs are also feasible and essential for small companies

Financial KPIs are not a luxury for corporations, but an indispensable tool for every SME. With the right 15 key figures, you gain the transparency and control capacity you need for sustainable growth. You identify risks earlier, make better investment decisions and continuously optimize your profitability.

The key to success isn't tracking all KPIs at the same time. Start with a few relevant key figures and gradually expand your system. Focus on the KPIs that are most important to your industry and business model. With a clear focus and the right methodology, you will quickly feel the benefits: more certainty when making decisions, better planning and ultimately more success.

Modern technology makes getting started today easier than ever before. Automated tools save you the hassle of using Excel and deliver accurate, up-to-date key figures at the push of a button. The investment in professional KPI tracking pays off several times over, through better decisions, avoided mistakes and seized opportunities. Financial KPIs are not only feasible for SMEs — they are essential for your long-term success.

Automatically keep an eye on the most important KPIs with Finokapi

The most important thing about KPIs is not only to understand them, but to understand them topical to last — and that is exactly what is often the bottleneck in day-to-day business.

Finokapi helps you here: The software does the manual calculation work and automatically transforms your financial data into clear, visual indicators. Instead of struggling through Excel spreadsheets, you'll get instant insights into trends and risks. This is how controlling goes from a chore to a real decision-making aid — completely without financial expert knowledge.

Want to automate your numbers? Get started with Finokapi now.

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