Jake Designs is a small firm which specializes as a consultant in product packaging and marketing within the cosmetics industry. The company recently appointed a new finance director, Katie Williams. In her first meeting with the CEO of Jake Designs, Jake McLeod, Katie expressed concerns at the limited focus of the current performance management system. Katie explained that, although the current system provided good details of the financial performance of the business, it is also important to include non-financial performance indicators, particularly those which will provide a better indication of the future performance of the business. She has suggested that the following performance measures should be reported to the board of directors:

number of customers;

average fees per customer;

average job completion time;

employee turnover rate;

employee job satisfaction;

level of customer satisfaction;

percentage of revenue from new customers.

Jake McLeod is sceptical about Katie’s suggestion. He is concerned that these additional performance measures will just cause more work for the accounting department and may act as a distraction from more important tasks such as ensuring that invoices go out promptly and customers pay on time.

Required:
Explain why the inclusion within the performance management system of the nonfinancial information suggested by Katie will provide a better indication of potential future success of the business.