What Are KPIs and Why Every Business Should Track Them
By Meliza Angelica Estinopo | Estinopo Accounting Firm

In my years of working with various business owners—big and small—I’ve learned that the difference between those who simply survive and those who thrive often boils down to one thing: knowing what to measure.

Let’s talk about KPIs.

What Are KPIs?

KPIs, or Key Performance Indicators, are measurable values that indicate how effectively a business is achieving its key objectives. These metrics serve as a compass—guiding your decisions, highlighting your progress, and warning you when things veer off track.

They’re not just numbers on a spreadsheet. They tell a story—your business’ story.

Why KPIs Matter More Than Ever in 2025

With new tax rulings and compliance updates being rolled out by the BIR this year, many businesses are scrambling just to keep up. But from where I stand as someone who sees both the financial and operational side of things—reacting is not enough. We must plan, measure, and refine.

Here’s how KPIs empower business owners:

1. KPIs Turn Bookkeeping Into a Strategic Tool

If you think your books are just for tax purposes, think again.

When maintained properly, your bookkeeping records are rich with insight. From cash flow patterns to expense allocations, these numbers—when translated into KPIs—can show you if your pricing is sustainable, if your payroll costs are too high, or if your revenue per customer is growing.

Example:
📌 Gross Profit Margin = (Gross Profit / Revenue) x 100
A decreasing margin might signal rising costs or pricing issues.

2. KPIs Highlight Operational Weaknesses Early

Let’s say you’re tracking your Accounts Receivable Turnover Ratio and notice a slowdown in collections. This could be a sign that your credit terms are too lenient—or worse, that your cash flow is about to hit a snag.

Would you rather wait for the problem to hit your bank account, or address it while it’s still just a red flag?

3. They Help You Prepare for Growth

Some of our clients used to think they weren’t “big enough” for KPIs. But the truth is, KPIs help you become big.

For instance, tracking your Customer Acquisition Cost (CAC) alongside your Lifetime Customer Value (LCV) gives you insight into whether your marketing spend is sustainable—and scalable.

4. They Make Year-End Reports Less Stressful

With accurate KPIs monitored monthly or quarterly, there’s less guesswork during tax season. You already have visibility into your revenue trends, deductible expenses, and cost spikes.

Instead of crunching everything in December, you’ve already built your numbers intelligently—week by week.

5. KPIs Foster Accountability Across Teams

One of the biggest transformations I’ve seen in my clients is the way KPIs bring clarity to their team. When everyone—from marketing to operations—knows what success looks like, it’s easier to work in sync.

Final Thoughts: Don’t Just Record—Respond

Here at Estinopo Accounting Firm, we help clients not only meet their compliance deadlines but build a financial system that works for them—not just the government.

We believe in turning your numbers into strategy. Into foresight. Into confidence.

So if you’ve been recording transactions but not reading the story they’re telling you—it’s time to shift gears.

Let’s turn your numbers into your advantage. It starts with tracking the right ones.

Would you like a free consultation to identify your first 5 KPIs? Just message our team and we’ll gladly help.