For MSPs, having healthy cash flow isn’t just about business metrics—it’s about having the resources to serve clients better, invest in growth, and stay competitive in a rapidly evolving industry. While most MSPs already track key performance indicators (KPIs), leading organizations are taking their performance management a step further by implementing Objectives and Key Results (OKRs). But what exactly are OKRs, and how do they complement your existing KPIs?
Understanding OKRs vs. KPIs
What Are OKRs?
OKRs (Objectives and Key Results) are a goal-setting framework that helps organizations set ambitious goals with measurable results. An Objective is a qualitative goal that answers “where do we want to go?” while Key Results are quantitative metrics that answer “how will we know we’re getting there?”
For example:
- Objective: Transform our accounts receivable process into a competitive advantage
- Key Results:
- Reduce DSO from 45 to 10 days
- Achieve 90% client adoption of automated payments
- Decrease AR staff hours by 80%
How OKRs Differ from KPIs
KPIs (Key Performance Indicators) are metrics that tell you how your business is performing in specific areas. Think of them as your dashboard—they show you what’s happening right now. While there are dozens of possible AR KPIs an MSP could track, here are five key KPIs that some MSPs may consider monitoring:
- Days Sales Outstanding (DSO) – Average time to collect payments; lower is better and indicates healthier cash flow
- Accounts Receivable Turnover Ratio – How many times AR turns over annually; higher ratios suggest more efficient collection processes
- Invoice Accuracy Rate – Percentage of invoices issued without errors; crucial for maintaining client trust and preventing payment delays
- Activation Rate – Percentage of clients using your electronic payment platform; higher rates typically correlate with faster payments and lower processing costs
- Dispute Resolution Time – Average time to resolve payment disputes; faster resolution maintains client satisfaction and keeps cash flowing
Remember, the goal isn’t to track every possible metric, but rather to identify and monitor the KPIs that best align with your business objectives and growth strategy.
How OKRs and KPIs Work Together
Your KPIs often become the foundation for setting OKRs. For example:
- If your KPIs show a DSO of 45 days (current state)
- Your OKR might target reducing it to 10 days (desired future state)
- Additional Key Results would outline other metrics needed to achieve this transformation
- Your KPIs then help you track progress toward these OKR targets
Why OKRs for Accounts Receivable?
While KPIs are essential for day-to-day management, OKRs help you:
- Set ambitious, transformational goals
- Align your team around clear objectives
- Break down silos between departments
- Drive significant performance improvements
- Create accountability through measurable results
OKR #1: Accelerate Cash Flow Through Payment Automation
This objective focuses on turning invoices into cash faster while reducing manual effort. Here’s what successful implementation looks like:
Recommended Key Results:
- Reduce Days Sales Outstanding (DSO) from 45+ to 10 days
- Achieve 90% client adoption of automated payments within 6 months
- Reduce accounts receivable balance by 95%
Real-World Success Story:
Simple Communications, an MSP outside Chicago, saw dramatic improvements after implementing automated payment solutions. “Within two months, my receivables went from $80,000 to just $4,000 outstanding,” reports owner Eric Peterson. Similarly, S1 Technology achieved remarkable client adoption: “First month was 15% adoption, following month 40%, and now we’re at 90% adoption.”
OKR #2: Optimize Payment Operations Efficiency
This objective targets the operational overhead of payment processing and reconciliation.
Recommended Key Results:
- Reduce manual payment processing time by 95%
- Achieve 100% automatic reconciliation between payment platform and accounting systems
- Decrease payment-related support tickets by 70%
Real-World Success Story:
Jeremy Roth, CEO of S1 Technology, transformed his payment operations: “Instead of me going to the mailbox every day, getting checks, stamping them, taking pictures, and going to the bank, now it all flows through automatically. Invoices are sent out, paid through ACH, automatically hit our bank account, which then updates QuickBooks and ConnectWise that the invoice is paid. It’s seamless.”
OKR #3: Enhance Payment Security and Client Experience
This objective balances security requirements with client convenience.
Recommended Key Results:
- Maintain 100% compliance with payment security requirements
- Achieve 95% client satisfaction with payment portal
- Enable multi-entity management for 100% of clients
Real-World Success Story:
Simple Communications found that even their most resistant clients embraced the new system. “We have a couple of clients that manage multiple businesses,” Peterson notes. “Being able to see them all in one nice portal—they love it. One client has eight entities now, and they’re like, ‘it’s so easy to view all eight entities right inside of this new portal.'”
OKR #4: Reduce Payment Processing Costs
This objective targets the reduction of payment-related costs while maximizing the efficiency of your payment operations.
Recommended Key Results:
- Reduce monthly processing fees by 75-80%
- Eliminate 100% of manual bank deposits and check processing
- Achieve 90% automation rate for payment reminders and follow-ups
Real-World Success Story:
Valiant Technology, a New York-based MSP, achieved remarkable cost savings: “If you take into account our monthly flat fee versus the fluctuating fee we were paying before, we saved between 75 and 80 percent of our monthly processing and platform fees.”
OKR #5: Improve Project-to-MRR Conversion
This objective focuses on strategically using project work to build a stronger recurring revenue base while maintaining profitability.
Recommended Key Results:
- Convert 85% of project clients to managed services
- Reduce project margin sacrifices to maximum 20% below standard rates
- Achieve 3-year minimum retention rate for converted clients
Real-World Success Story:
Triada Networks demonstrates the power of strategic project pricing: “We sacrificed margin up front on projects… because we knew we could turn that project within four to eight weeks. The managed services was extremely high and our profit margins on that was high. Even though we had a 60-day leave clause in the contract, we knew that our client retention was at least three years.”
Bonus OKR: Maximize Working Capital Efficiency
While the previous OKRs focus specifically on accounts receivable, this bonus objective helps MSPs think more broadly about cash flow management and business optimization.
Recommended Key Results:
- Optimize payment timing to maintain 30+ days of working capital
- Reduce the gap between AR and AP cycles by 15 days
- Achieve 95% first-time match rate on payment reconciliation
Real-World Success Story:
Jeremy Roth from S1 Technology shares how improved working capital management transformed their operations: “transitioning to an electronic payments portal… now our collections are down to probably about ten days of invoicing.” This acceleration in collections, combined with strategic vendor payment timing, has given them more flexibility to fund projects, payroll, and other critical business needs.
Implementation Tips for Success
Based on our partners’ experiences, here are key tips for implementing these OKRs:
- Start with Quick Wins
- Focus first on automating recurring payments
- Use provided email templates for client communication
- Leverage automatic payment reminders
- Monitor Progress Regularly
- Use built-in analytics dashboards
- Track key metrics like DSO and adoption rates
- Celebrate wins with your team
- Address Client Concerns Proactively
- Communicate security measures
- Provide clear instructions for portal access
- Offer support during transition
Making the Transition
Remember that implementing OKRs is a journey, not a destination. Start by ensuring your KPIs are well-established and providing reliable data. Then, use those insights to set meaningful, achievable OKRs that push your organization forward.
Many MSPs find success by starting with a single objective, such as improving activation rates or reducing DSO. Once you’ve achieved success in one area, you can expand your OKRs to cover other aspects of your accounts receivable operations.
As Triada Networks and other partners have shown, the key is to maintain momentum while being patient with the process. Change doesn’t happen overnight, but with clear objectives and measurable results, you can transform your AR operations into a strategic advantage for your MSP.
Conclusion
While these OKRs might seem ambitious, they’re based on actual results achieved by MSPs like yours. As Raffi Jamgotchian of Triada Networks notes, “We shortened our pay cycle from 50-60 days to below 30 days… It’s simplified our workflow and made things easier for our clients.”
The key is to start with clear objectives, measure progress consistently, and leverage the right tools and partnerships to achieve your goals. Remember, improving accounts receivable isn’t just about getting paid faster—it’s about building a stronger, more efficient business that better serves your clients.
Want to learn more about implementing these OKRs in your MSP? Contact us to discuss how we can help streamline your payment operations and accelerate your cash flow.
