What Are the 5 Most Important KPIs to Track in 2025?

It is crucial that every part of your business is aligned and focused on the metrics that really drive performance for growth. In this article, we break down the 5 key areas where your attention should be focused when it comes to KPI’s, from profitability and cash flow to marketing and operations. These KPIs will help ensure accountability within the team, support better decision-making and keep your strategy on track.

Gross Profit (GP)

Gross profit indicates how efficiently a company is producing and selling their goods or services. If your margins are slipping, it’s often a sign of pricing issues, discounting, rising costs, or inefficiencies. Monitor by product or service line, customer, geographic region etc and stay ahead of any downward trends. For more details on GP, please see the following article here.

EBITDA

Track your EBITDA (earnings before interest, tax, depreciation, and amortisation) to understand the true operational performance of the business. It is a view of commercial net profit before financing costs and exceptional business expenses - providing greater comparability with businesses across all sectors

Overheads to Sales Ratio

This KPI shows whether your cost base is scaling efficiently with your revenue. In 2025, with rising employer NI and general inflation, many SMEs are seeing this increasing. Use this ratio to ensure you’re not letting fixed costs quietly erode your profitability.
 

Debtor Days

Are you collecting cash on time? Debtor days creeping up could be a sign of customer cashflow issues or a weakness in your credit control processes. The knock-on effect on your liquidity can be serious.

Creditor Days

How long are you taking to pay suppliers? While stretching terms might help short-term cashflow, it could impact relationships or even pricing. In many cases, it's worth having a face-to-face conversation with key suppliers to explain your situation and discuss whether more favourable terms can be agreed. It’s also wise to regularly benchmark supplier quotes.

Stock Days

Are you tracking how long stock remains on hand before being converted into sales? Rising stock days often indicate issues in forecasting customer demand, or bottlenecks in order fulfilment. You may also want to consider supply chain delays caused by external factors in play.

Liquidity Ratio

For a broader view, you might also monitor your current ratio (current assets ÷ current liabilities). 2:1 for current ratio indicates you can meet short-term obligations without pressure.
 

Lead Measures

Are you tracking the activity that drives sales?

• Number of BD (Business Development) calls
• Meetings held
• Proposals sent

Review your quarter 1 results. Were targets missed? Was it due to a drop-in activity or a weak conversion rate? If your pipeline has a time lag, this activity will determine the second half of the year. For more details on lead and lag measures, read our recent article here.

Track total value in the sales pipeline and understand how long leads typically take to convert. If you need to hit big Q4 numbers, that work needs to be happening now.
 

OTIF (On Time, In Full)

With global supply chains under pressure and economical and political instability amoungst nations often causing unplanned delays, delivering reliably matters. Poor OTIF performance damages customer trust, puts pressure on internal resources, and often results in avoidable operational disruption.

Productivity Factor

This KPI tracks GP generated by overhead staff members. It highlights how efficiently your workforce generates value. For more information on how to achieve this, you can read another article here.
 

Your sales team is only as good as your pipeline, and your pipeline is only as good as your lead generation.

• Number of inbound enquiries
• Website forms completed
• Content downloads (Specifically gated content)

These metrics will help you to understand which campaigns are driving interest and which ones need refinement or a rehash. It is important to make sure that you’ve got attribution in place, don’t just track volume - track what’s actually converting into sales. While financial KPIs like GP, debtor days, and EBITDA reflect the outcome, non-financial KPIs such as BD calls, OTIF, and content downloads reflect the drivers of performance.

Both are equally important; however, it is the non-financial indicators that often show you any problems before they hit your profit and loss. There are endless metrics that you could be tracking, but we recommend focusing on the ones that drive decisions. The right KPI’s don’t just report performance, they drive it. By choosing meaningful, department-specific metrics and using them to inform action, your business can stay agile and focused for growth.

How can we help?

If you would like further advice on business growth and financial management, please get in touch with us using the form via the button below, and a member of our team will be in touch. Alternatively, you can contact us via email or phone and we will be happy to advise on the best solutions for your business.

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Please note: This article is provided for information only and was correct as at the time of writing (29/05/25). Any lists and details provided above are not exhaustive and are not intended to be full and complete guidance. No action should be taken without consulting detailed legislation or seeking independent professional advice. Therefore, no responsibility for loss occasioned by any person acting or refraining from action as a result of the material contained in this article can be accepted.