Essential accounting metrics for small businesses

If you run a small business in Kenya , whether it's a grocery store in Kawangware, a boutique in Westlands, or a hotel supplies shop along River Road , you already know money comes in and goes out. But do you know which numbers actually tell you if your business is healthy?

You don't need a CPA to track the right metrics. You just need three.

Profit Margin: Are You Actually Making Money?

Profit margin is the money left after you pay for everything. If you sell a crate of tomatoes at KES 4,500 but bought it for KES 3,800 and paid KES 300 for transport, your profit is KES 400. That's your margin.

Track this for every product or service. If something has a very thin margin, you're working hard for nothing. Increase your price or drop it.

SokoWise Accounting automatically calculates your profit margin on every sale. Open your dashboard and you'll see it , no formulas, no spreadsheets.

Cash Flow: Do You Have Money Right Now?

You can have a profitable business and still be broke. How? If your customers buy on credit and your suppliers demand cash. That's the reality for many SMEs in Kenya.

Cash flow is simple: money in your pocket vs. money leaving your pocket this week. Check it every Monday morning.

• Money in: M-PESA payments, cash sales, customer deposits
• Money out: rent, stock purchases, staff salaries, transport, M-PESA transaction fees

If what's leaving is more than what's coming in, you need to act fast , chase debtors, delay a purchase, or ask for payment upfront.

Revenue Trends: Is Business Growing or Slowing?

Compare this month's sales to last month. Are you going up or down? A drop might mean a competitor opened nearby, or your regular customers are buying less. A jump might mean your new supplier is selling faster.

Look at the trend, not just today's number. One bad day is nothing. Two bad weeks is a problem.

SokoWise shows a chart of your revenue over time so you can spot trends without digging through receipts.

What You Don't Need to Track

You don't need to track complicated ratios like ROI or EBITDA. Those matter for big companies. For a small business, knowing your margin, cash, and revenue trend is 80% of the picture.

The other 20%? Just keeping accurate records of everything. And SokoWise does that automatically , every sale from your POS, every expense you log, every M-PESA transaction.

Open your SokoWise dashboard. The numbers you need are already there.