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Lagging and Leading Indicators with Cycle CPA

⏱️ 32:16 🎤 Joseph Policastro
AUDIO EPISODE
Lagging and Leading Indicators with Cycle CPA
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Chapters

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  • 0:00
    Introduction to Cycle CPA
    Michael Pletz introduces Joseph Policastro of Cycle CPA, highlighting their accounting services and specialization in the hardscaping industry.
  • 4:02
    Leading vs. Lagging Indicators
    Joseph explains the difference between leading indicators (inputs driving future results) and lagging indicators (scorecards of past performance).
  • 8:08
    Examples of Leading Indicators
    Joseph provides concrete examples of leading indicators for hardscaping businesses, such as estimates sent, website inquiries, and scheduled jobs.
  • 25:10
    Non-Financial KPIs & Guidance
    The discussion shifts to how non-financial KPIs can inform strategic decisions, like website updates, and how Cycle CPA guides clients using these insights.
  • 30:41
    Leading Indicators & Pricing
    Joseph and Michael explore how leading indicators, such as proposal close ratios, can hint at pricing issues, and the importance of looking at multiple metrics for a complete picture.
  • 42:32
    Realistic Goal Setting
    Joseph discusses the importance of realistic goal setting for companies, utilizing benchmarks and past data to inform growth strategies and manage risk.
  • 55:14
    New Services & Goal Setting
    The conversation addresses goal setting for established companies adding new services, like hardscaping, emphasizing the value of data and benchmarks for realistic expectations.
  • 1:08:29
    Examples of Lagging Indicators
    Joseph revisits lagging indicators, such as revenue and net profit, emphasizing their role as a 'scorecard' and the need for timely review to avoid year-end surprises.

Speakers

J
Joseph Policastro
Cycle CPA

Key Takeaways

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Track both leading and lagging indicators to gain a holistic understanding of your business's health and future trajectory.

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Monitor leading indicators like the number of estimates sent, proposals, and website inquiries to proactively adjust sales and marketing efforts.

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Utilize non-financial KPIs (e.g., proposal close rates, website leads) to identify areas for improvement beyond just financial metrics, such as website optimization or marketing strategy.

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Set realistic growth goals by leveraging industry benchmarks and your company's historical data, rather than making overly aggressive projections.

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For new services, budget for labor based on revenue expectations (e.g., 20% of total sales for field labor) to guide staffing and operational planning.

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Regularly review your financial KPIs throughout the year (not just at year-end) to course-correct promptly and prevent undesirable outcomes.

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Invest in tools like bookkeeping services and field management software early on to gather essential data and shorten the learning curve in business operations.

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