5 FP&A KPIs Every Small Business Should Track
If you’re running a business, you’ve probably got a sixth sense for when something feels “off” financially. Cash flow feels tight. Revenue’s growing but your bank account doesn’t reflect it. Expenses creep up slowly until suddenly—boom—you’re in the red.
That’s where FP&A (Financial Planning & Analysis) comes in. It’s not just for large corporations with finance teams and boardrooms. For small businesses, tracking the right KPIs (Key Performance Indicators) can uncover issues before they become problems—and unlock smarter decisions.
At FinSight Horizons, we work with founders and operators to bring calm to the chaos of business finances. Whether you’re just getting started or scaling fast, here are five essential FP&A KPIs every small business should be tracking.
1. Cash Runway
What it is: The number of months your business can operate before running out of cash, assuming no new revenue.
Why it matters: If you’re burning cash, runway tells you exactly how much time you have to turn things around. It's especially critical for startups, bootstrapped businesses, or anyone navigating unpredictable sales cycles.
💡 Pro tip: Set a threshold and alert yourself when you dip below it. Three months or less? Time for a cash plan.
2. Gross Profit Margin
What it is: (Revenue – Cost of Goods Sold) / Revenue
This KPI shows how much you keep from each dollar of sales after covering direct costs.
Why it matters: It’s your first line of profitability defense. If your gross margin is shrinking, it could mean rising supply costs, underpriced services, or inefficiencies.
✅ Healthy margins = healthy pricing strategy. Unhealthy ones? Time to investigate what’s eating into your earnings.
3. Operating Expense Ratio (OpEx as % of Revenue)
What it is: Your total operating expenses divided by revenue.
Why it matters: It tells you how “lean” your business is. Are your overhead and day-to-day expenses growing faster than your income?
📊 This is the KPI that helps small businesses identify scope creep, bloated subscriptions, and unnecessary hires.
4. Customer Acquisition Cost (CAC)
What it is: Total marketing + sales spend divided by the number of new customers acquired.
Why it matters: If you don’t know how much it costs to acquire a customer, you don’t know if your marketing is working—or how long it’ll take to see ROI.
💸 Pair this with Customer Lifetime Value (CLTV) to make sure you're not spending $100 to earn $90.
5. Forecast Accuracy
What it is: The percentage difference between your projected and actual revenue or expenses.
Why it matters: Forecasting isn't just about looking smart on spreadsheets. It’s about building confidence in your decisions. If your forecasts are way off, you’re flying blind.
🔍 A 5–10% variance is okay. Bigger than that? It may be time to revisit your assumptions—or get a second set of eyes.
Why These KPIs Matter More Than You Think
Tracking these five KPIs isn’t about getting a gold star on a finance test. It’s about being the kind of business owner who doesn’t get blindsided. The kind who’s ready to hire (or not), launch a new product (or hold off), raise capital—or just sleep better knowing your business is on solid ground.
At FinSight Horizons, we help small businesses make sense of their numbers, from dashboards to deep dives. If you're tired of financial guesswork, it might be time to bring in a fractional FP&A partner who can help you track what matters—without the corporate jargon.
Ready to Get a Handle on Your KPIs?
Let’s build a system that works for your business.
📅 Book a free 15-minute consult or visit www.finsighthorizons.com to learn more.
