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9 Accounting KPIs Every Singapore SME Should Track (Short & Simple+)

  • Writer: Agnes Lee
    Agnes Lee
  • Sep 22, 2025
  • 3 min read

Use this one‑pager to keep a pulse on profit, cash, and collections. Each KPI includes a plain‑English meaning, a quick formula, and a simple way to improve it. You can pull most numbers from your accounting system’s Profit & Loss, Balance Sheet, Aged AR/AP, Inventory, and Cash Flow reports.


Works with ABSS/MYOB & SQL Account:

  • ABSS/MYOB: Reports ▶ Accounts (P&L, Balance Sheet, Cash Flow), Reports ▶ Sales/Purchases (Aged AR/AP), Reports ▶ Inventory (stock).

  • SQL Account: Reports ▶ GL (P&L/Balance Sheet), Customer/Supplier Aging, Stock Reports.Both systems support audit trails and period locks for clean month‑end closes.


1) Gross Profit Margin

What: How much you keep after direct costs of sales.Formula: (Revenue − Cost of Goods Sold) ÷ Revenue × 100%Aim: Trend up or stable; compare by item/customer.

Improve it: Review pricing, negotiate supplier costs, push higher‑margin items.


2) Net Profit Margin

What: Bottom‑line profit after all expenses & tax.Formula: Net Profit ÷ Revenue × 100%Aim: Positive and improving vs last quarter/last year.

Improve it: Trim overheads (rent, software, logistics), raise low prices, stop unprofitable lines.


3) Operating Cash Flow

What: Cash generated by day‑to‑day operations (not loans/investments).Where: Cash Flow Statement → Operating Activities totalAim: Positive most months/quarters.

Improve it: Collect faster (see DSO), right‑size stock (see DIO), stagger big supplier payments.


4) DSO — Days Sales Outstanding (Receivables Days)

What: Average days customers take to pay (lower is better).Formula: (Average Trade Receivables ÷ Credit Sales) × 365Aim: Shorten vs last quarter; watch % of AR > 60 days.

Improve it: Deposits for large orders, 1/10‑Net30 discounts, automated reminders, clear stop‑supply rules.


5) DPO — Days Payables Outstanding (Payables Days)

What: Average days you take to pay suppliers.Formula: (Average Trade Payables ÷ Credit Purchases) × 365Aim: Pay on time; don’t stretch beyond agreed terms.

Improve it: Negotiate 30–60 day terms, use weekly payment runs, align payments to cash inflows.


6) DIO — Days Inventory Outstanding (Stock Days)

What: How long inventory sits before sale.Formula: (Average Inventory ÷ COGS) × 365Aim: Lower without stock‑outs; track by category/warehouse.

Improve it: ABC analysis, reorder points, clear slow‑movers (bundle/discount).


7) Cash Conversion Cycle (CCC)

What: Net days cash is tied up in operations.Formula: DIO + DSO − DPOAim: Shorter is better; target lower than last quarter.

Example: DIO 40 + DSO 35 − DPO 45 = 30 days tied up.


8) Current Ratio (Liquidity)

What: Ability to cover short‑term bills.Formula: Current Assets ÷ Current LiabilitiesHint: < 1.0 can be a red flag; very high may mean idle cash/stock.

Improve it: Collect faster, reduce slow stock, line up short‑term facilities before you need them.


9) Opex Ratio

What: Overheads versus revenue (cost discipline).Formula: Operating Expenses ÷ Revenue × 100%Aim: Stable or falling as revenue grows.

Improve it: Review subscriptions, renegotiate utilities/logistics, automate manual tasks.


Quick Wins (Do This Next)

  • Set targets + owners: e.g., DSO ≤ 35 days (Owner: Finance), Gross Margin ≥ 28% (Owner: Sales+Ops).

  • Automate nudges: AR reminders weekly; flag slow‑moving items after 60 days with a price/promo action.

  • Close fast & lock: Aim to close books by the 5th working day; lock periods to protect results.


Monthly Review Routine (10 minutes)

  1. Export last 12 months and chart Gross/Net Margin trends.

  2. Calculate DSO, DPO, DIO, and CCC; add one small action to shorten CCC.

  3. Scan Current Ratio and Opex Ratio; set 1 target to improve next month.


Start now: Pull AR/AP aging and inventory reports today, compute DSO/DPO/DIO/CCC, and message your team one action item to move the numbers next month.



 
 
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