Is Your Financial Reporting on Target?

Nick Roell

Mar 10, 2023

Financial Reporting

While your P&L paints a broad picture of financial viability, it may not be telling you the whole story.

Too often, businesses have a financial reporting structure that makes it difficult to identify what’s driving results. The chart of accounts is either too large to make decisions or too small to see areas of improvement. Optimizing the chart of accounts allows business owners to structure data in a way that allows key performance indicators (KPIs) to be tracked and measured.

Establishing the right KPIs depends on understanding business profitability by department, location or business unit. At Kirsch CPA Group, we go beyond a simple P&L structure to provide an accurate picture of profitability that leads to more effective strategies.

Here’s an example.

Case Study: The Key to Business Growth Was Hiding in the Data All Along

One client came to us seeking a review of their financials with the goal of maximizing the value of five franchise locations. An initial review led us to suspect that their profitability was threatened by specific locations, but their financial data wasn’t structured in a way that allowed them to see it.

The Kirsch team took their QuickBooks file and restructured it to provide transparency into each location. The results confirmed our initial theory and, by closing down four unprofitable locations, our client saw a return to profitability. The review also revealed the fact that their most profitable locations are in rural areas where consumers are less likely to buy products and services online.

Keep to the Path with KPIs Aligned with Your Goals

When you don’t have the right KPIs or financial data structure it’s easy to invest money on projects and ideas that don’t have long-term value.

Here are some examples of KPIs that can be used to shine a light on your genuine profitability.


  • Inventory turnover in days: (beginning inventory + end inventory / 2) / COGS x 365
  • Gross margin %
  • Inventory on hand
  • Average cost per unit
  • Units produced per hour
  • Production/machine downtime
  • Defect rates
  • Return on assets


  • Pledge fulfillment percentage
  • Change in donor/donation growth
  • % of non-disbursed income
  • % split of revenue versus donated funds
  • Budget to actual on projects
  • Donation revenue per employee
  • Restricted versus unrestricted funds
  • Donor retention rate
  • Fundraising ROI

Service Providers

  • Average revenue per project
  • Net revenue per hours
  • Billable hours tracking
  • Utilization
  • New customers acquired
  • Project profitability

Ensure Effective Financial Reporting

Whatever your business goals, the Kirsch team has deep experience in providing forward-looking financial and advisory services that will help you get there faster. We specialize in helping small and mid-size businesses and nonprofits create the strategies, financial structure, KPIs, and reporting that drive growth and profitability. Speak to one of our CPAs to get started.

Contact us to learn more about our accounting advisory services


About The Author

Nick is passionate about making an impact on small and medium-sized businesses. Focusing on increasing the performance of…

Read More

Sign Up for Email Updates

Accounting & Financial News

What’s the Difference Between a Calculation of Value and a Conclusion of Value?

Most business valuation assignments call for a conclusion of value. However, there may be times when a…

Construction Business Owners: Avoid These Two Common Accounting Problems

For construction companies, accounting isn't as simple as just balancing the books every month. Contractors tend to…

IRS Issues Final Regulations Regarding the Advanced Manufacturing Investment Credit

The Creating Helpful Incentives to Produce Semiconductors (CHIPS) for America Act — signed into law in 2022…