As an accountant, you’d think I was a total numbers person. But the truth is: I’m not a numbers person. Awkward, I know, given my profession, but go with me here. I’m a big-picture firm owner who is, in fact, living proof that you can be a great accountant and not be detail oriented.
For years, I treated metrics like most firm owners do: tracking whatever fell out of the accounting system. Things like gross profit margin, net income, revenue—the basics that show up like uninvited but useful relatives.
Then LedgerGurus, despite a strong start, began to flounder. Our gross profit margin had been quietly sliding for years, something I noticed and diligently logged. But then, I shrugged it off, because we were growing fast and I believed it would surely even out. Spoiler: it did not. The slide caught up to us, and we started losing money.
That’s the day I knew I had to start focusing on metrics.
The real problem wasn’t the margin
Here’s the part that still makes me cringe. I could tell you that our gross profit margin was declining, but I couldn’t tell you why. Were we overstaffed? Underpriced? Inefficient? Some combination of all three? I had no idea because we had no visibility into our own operation. So when “concerning” tipped into “dire,” I had no idea where to begin.
You can’t fix a problem you can’t see, and you can’t see a problem if you haven’t built the system to surface it. So we got serious—not “track a few more numbers” serious, but “design a real measurement system from scratch” serious. We sat down with our team and asked the question we’d been avoiding: if our firm were running the way I keep saying I want it to, what would be true, and how would we know?
That question built everything that came next.
Real transparency lives at three layers
If your firm currently lacks this level of transparency, you’re not alone. In an Intuit survey of 700 accounting professionals, 89% said their existing tools could be better integrated to truly support their growth. Most firms can see something, like a top-line number. They just can’t see enough and don’t know what’s actually driving it or dragging it down. The fix isn’t just more data, but the right data at the right level.
And one layer of metrics doesn’t cut it. You actually need three:
- Company-level, to monitor and maintain firm health;
- Team-level, to see which units are creating or eroding that health; and
- Individual-level, so you know who actually owns the lever.
Without all three, you’re either staring at a vague dashboard hoping it improves or micromanaging people without context. The stack has to line up, and once it does you need a way to build it.
The eight steps we wish we’d had sooner
Here’s the eight-step process we use to build our line of sight, which was faster than another three years of guesswork.
1. Refine your objective: Pick the area that matters most right now and create a clear, specific objective. Not just “be better,” but something specific, like “Utilize our team in a way that creates a happy team, happy clients, and a profitable company.” If it sounds like a bumper sticker, dig deeper.
2. Define what success looks like: Make it measurable: “Organizational gross profit margin is 50% or higher, measured annually.” If you can’t write success in one sentence with a number in it, your team can’t hit it (and honestly, neither can you).
3. Ask the right questions: Most firms skip this step, and it’s why their metrics never help. List the questions you need answered to hit the goal. For example, if your goal focuses on gross margin, your questions might be along these lines: Are we estimating time correctly? Do prices reflect the true cost of delivery? Is scope creep eating margin? The metric you need is hiding inside the question.
4. Identify the metrics: Now, and only now, match a metric to each question. “Are we estimating time correctly?” leads to estimates versus actual hours. “Scope creep?” leads to client net promoter score plus team NPS. One question, one or two metrics, no padding.
5. Rate the correlation: For every metric, ask whether it actually moves the needle on the goal, on a scale of 1 to 5. Anything below a 4 gets cut. Most of the metrics firms track score about a 2.
6. Set fair, realistic targets: Translate each metric into something your team can hit: “Estimated vs. actual engagement hours are accurate within 20% on 80% of engagements.” Build it with your team, not over them.
7. Identify responsible parties: Every metric needs an owner. One real person, not a committee or a fuzzy “the team.” At LedgerGurus we call this identifying the wringable neck. This is where the company metric becomes a team target and then becomes an individual scorecard—and the three layers finally click together.
8. Plan measurement and reporting: Decide how and when each metric is reported and by whom. Is your cadence weekly, monthly, or quarterly? Is reporting happening in a Google form, a team meeting, or a dashboard? Codifying this turns metrics into a habit instead of an anniversary you forgot.
The punchline
A few years after I got serious about metrics, I look back and can’t believe I ran a firm any other way. Our margin is healthy, I know which teams and engagements move it, and when something slips, I know early. Not three years and a panic attack later.
If you’ve been watching a number slide too long without understanding why, take this as a sign. You don’t need to be a numbers person (again, I’m living proof). You just need a system that turns numbers into answers.
The numbers have been trying to speak to you this whole time; metrics are how you finally hear them.
Want to hear more from Brittany? Join us at an upcoming Intuit Better Together event to keep the conversation going. Learn more and register here.
ABOUT THE AUTHOR:
Brittany Brown is a Professional in Residence at Utah Valley University and the Founder and CEO of LedgerGurus, an industry leading ecommerce accounting CAS and inventory practice. She is a CPA, certified QuickBooks ProAdvisor, and member of the Intuit Partner Council.
Photo credit: rawpixel.com/Freepik
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