Define: Key Performance Indicators

UK Accounting Glossary

Definition: Key Performance Indicators


Quick Summary of Key Performance Indicators


Quantified measures of factors that help to measure the performance of the business effectively.



What is the dictionary definition of Key Performance Indicators?

Dictionary Definition


Key business statistics such as number of new orders, cash collection efficiency, and return on investment (ROI), which measure a firm’s performance in critical areas. KPI’s show the progress (or lack of it) toward realising the firm’s objectives or strategic plans by monitoring activities which (if not properly performed) would likely cause severe losses or outright failure.


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Full Definition of Key Performance Indicators


Key Performance Indicators or KPI are financial and non-financial metrics that are used to gauge the performance of an organization against its goals. Key Performance Indicators are made up of three main precursors: measurability, team acceptance and conformance to organizational goals. Therefore, a business must carefully define its goals before Key Performance Indicators can be implemented. Usually, Key Performance Indicators are chosen factors that directly or indirectly play a part in product or process effectiveness. Key Performance Indicators should be the same from year-to-year. Examples of Key Performance Indicators include percent of income from repeat customers or annual increases in units sold. In business intelligence, Key Performance Indicators are used to assess the current status of a business and help to define an intended course of action. Like other financial measurements, Key Performance Indicators differ from business to business and from industry to industry. Key Performance Indicators are also known as Key Success Indicators (KSI).


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Examples of Key Performance Indicators in a sentence


You should be monitoring your key performance indicators to assess if performance is going as well as it should be.
There are no KPIs currently in place for product returns neither is any provisions requiring the company to keep data on the subject.


Synonyms For Key Performance Indicators


key performance indicator, basic indicators, key benchmarks, headline indicators, kpi


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Definition Sources


Definitions for Key Performance Indicators are sourced/syndicated and enhanced from:

  • A Dictionary of Economics (Oxford Quick Reference)
  • BusinessDictionary.com
  • Oxford Dictionary Of Accounting
  • Oxford Dictionary Of Business & Management

This glossary post was last updated: 23rd December 2018.