Given that most organisations will use a mixture of financial and non-financial measures (NFMs) in running their businesses, it follows that their budgeting, forecasting and reporting systems will also use a combination.
Management will invariably want to know what levers they can pull to improve performance, and these levers will be non–financial, as a result establishing a relationship to financial measures is necessary. In an ideal world this would be a quantitative relationship which could be built into a business model, but the reality is that just showing the linkage between NFMs and financial measures is a sufficient start for most.
The purpose of this guideline is to illustrate how to link NFMs with financial measures. In doing so, you should arrive at a comprehensive and balanced set of measures.
This guideline directs you to a number of different ways of linking financial and non-financial KPIs:
- A balanced scorecard approach
- A quality model (European Quality Model)
- Other corporate models
- A checklist type approach
Further reading
Further reading into some of the tools and models discussed here is available through the ICAEW Library and Information Service resources below.
These resources are available to ICAEW members and ACA students.
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Update History
- 14 Nov 2014 (12: 00 AM GMT)
- First published
- 04 Jul 2023 (12: 00 AM BST)
- Page updated with Further reading section, adding additional reading on some of the tools and models discussed. These new resources provide fresh insights, case studies and perspectives on this topic. Please note that the original article from 2014 has not undergone any review or updates.
