10 Financial Metrics Every Controller Should Monitor In A Small Business (And In A Housing Authority Too)

If you sit in the controller seat long enough, you realize most financial questions boil down to something simple: are we okay, or are we drifting toward trouble without noticing.

The terminology can sound intimidating, but underneath it you are really tracking a small set of numbers that tell you whether cash is stable, operations are sustainable, and assets are being taken care of. Think of these as your dashboard, not an accounting exam.

First comes cash and runway. Two numbers matter a lot here: cash flow from operations and days cash on hand. Cash flow from operations is just this question: after we collect what people owe us and pay our normal bills, did money actually stay in the bank or leave it. Days cash on hand is your “how long could we keep going if nothing else came in” number. For a small business that might be labeled in months; for a housing authority you might think in terms of how many months of subsidy and rent equivalents you have in reserve. The Government Finance Officers Association suggests governments hold at least two months of operating expenditures in reserve, and CB Insights found that 38 percent of failed startups blamed running out of cash as a key reason for failure. Those are different sectors, but they are both sending the same message: cash and runway are not optional details.

Next is the basic “plan versus reality” view. That is your budget versus actuals and your operating margin or surplus. In plain language: did we bring in roughly what we thought we would, did we spend roughly what we planned to spend, and did we come out ahead or behind. For a housing authority that may mean looking at each program separately, such as Housing Choice Vouchers or Public Housing, since each pot of money has its own rules. For a small business it might be lines of business or locations. The real value is not in being perfect, it is in asking “why” whenever the actual result is very different from the plan. Organizations that look at that gap regularly tend to adjust faster and perform better over time, which shows up again and again in management research, including work summarized in Harvard Business Review.

Then there is short term health: can we pay our bills on time without scrambling. Three ideas matter here. Liquidity, which shows up in ratios like current assets divided by current liabilities, is just asking if near term resources comfortably cover near term obligations. Collections, often measured as how many days on average it takes people to pay you, tell you if customers or tenants are slowly turning into an interest free loan. Payables, which is how long you are taking to pay vendors, show you if you are silently using them as your bank. In a small business that might look like one big customer always paying late while payroll keeps rising. In a housing authority it might be tenant receivables creeping up while you delay payments to maintenance vendors and utilities. None of that shows up overnight; it drifts, which is why watching those three together is so important.

Long term strength is about how much flexibility you have when life gets messy. Debt service coverage ratio, often shortened to DSCR, tells you whether normal operations generate enough cash to comfortably make your loan or bond payments. If that number slides toward 1.0, you are using almost all your breathing room on debt. Capital reserves and reinvestment tell you whether buildings, vehicles, and systems are being maintained or quietly worn out. HUD has estimated tens of billions of dollars in backlog across public housing capital needs nationally, which is what it looks like when capital reinvestment is postponed year after year. For a small business this might show up as aging equipment that keeps breaking; for a housing authority it might be roofs, boilers, or elevators that reach a crisis at the same time. Finally, your administrative cost ratio, or overhead, is worth tracking so you know whether the money spent on “keeping things running” is helping you serve more residents or customers effectively, rather than just adding layers.

If you want a practical way to use all of this, build a simple one page monthly scorecard. Include cash flow from operations, days cash on hand, budget versus actual, operating margin or surplus, a basic liquidity view, collections and payables days, DSCR if you have debt, capital reserve balance against upcoming needs, and an administrative cost ratio. Look at it with your leadership team, not just inside finance. You do not need to debate every decimal. You are trying to answer three questions: is cash stable, are we structurally sustainable, and are we protecting the assets and mission we are responsible for. When those ten metrics are watched consistently, both small businesses and housing authorities make better, calmer decisions long before a crisis hits.