CFOs and business leaders have to rely on numbers to make smart decisions. With financial dashboards, business leaders have access to a live and up-to-date visual representation of their business’ financial standing. As such, financial dashboards are a critical tool for CFOs and management teams to assess the current state of business affairs and make swift and informed choices.
With the rise of technological innovations and big data comes interactive dashboards. Hopefully, maintaining data across spreadsheets is a thing of the past in your organisation, or at least, not your primary tool for analysis. With dashboards, you can drill into data, see everything in real-time and pull reports with the click of a button.
Customisable dashboards can be designed such that the necessary key performance indicators (KPIs) are in clear view. Within an organisation, each department and manager has its own set of goals that precipitate the need for its own set of data.
When it comes to an executive financial dashboard, you can create the perfect mix of financial data and critical metrics to gain insight into your business. As a CFO, some of the essential KPIs to include are:
Every financial dashboard serves a different need and a variety of analysis.
Here’s a look at some of the most common types of financial dashboards that exist to serve the needs of CFOs better:
This dashboard summarises profits and losses by showcasing revenues, expenses and cost acquired throughout a fiscal year. A Profit & Loss dashboard helps a CFO recognise where costs can be cut so that profits can be maximised. Some of the KPIs tracked are: operating expense ratio, net profit margin and gross profit margin. This type of dashboard is often reviewed on a monthly and quarterly basis.
If you’re looking to know whether or not your business can afford its current short-term liabilities, then a cash management dashboard is the right dashboard for you. It involves the current ratio and quick ratio. A cash management dashboard can be used for analysis to improve your business’ overall financial health. It will also give you a quick review of if your operations are currently fluid enough to survive.
For a high-level view on where to spend revenue, a financial performance dashboard can assist. This is a visual display of the primary metrics on your balance sheet. Financial performance dashboards can be built to display:
With these metrics, you can see how well your assets are being managed. If you leave these critical metrics unchecked for too long, you can risk going bankrupt. With a dashboard in place, you’re able to have a hold on your business’ long-term viability, as well as easily share relevant information with shareholders.
AR & AP dashboards show how quickly your business can pay off suppliers and how quickly you can collect payments you are owed. They show this information from a bird’s eye view, but if need be, you can click on the totals to see who owes you what and who you owe, too. Having this information can help you improve vendor relationships and also ensure that invoices are managed on time. Automation solutions like SolveXia can help to automate invoices, as well as provide real-time performance metrics. Many businesses fall behind on payments because of bottlenecks or delayed approval processes, but automation software can prevent such delays.
When it comes to building a financial dashboard, keep in mind these best practices:
What dashboard is right for you? You are likely going to work with multiple financial dashboards, but you have to start with one! To build your financial dashboard, follow these steps:
1. Choose Metrics: Depending on the business goals you are tracking, you’ll be able to determine the right metrics. One way to narrow the choice of metrics down is to make sure that you’re choosing information that is high-level enough so you can limit the amount of information in the dashboard. A dashboard offers you the ability to drill deeper down if need be, so there’s no reason to have to put everything on the dashboard at once.
2. Track Performance: Based on the metrics you are tracking, you can choose the periods in which you track information. Therefore, you can visualise trends over distinctive periods.
3. Use Graphs: You can choose to chart information with single data points or by mixing multiple metrics.
4. Decide Frequency: For financial leaders, the best rule of thumb is to set up quarterly dashboards for assessment purposes.
CFOs and business managers in any department can benefit from various types of dashboards. Dashboards don’t only have to showcase financial information.
Here’s a brief look at some other types of dashboards that can assist your organisation:
1. Marketing Dashboards: Marketing dashboards help to assess goals and leads. This is especially useful if your business works with a set sales funnel so that you can gauge how your marketing efforts are moving customers into different stages of the sales cycle.
2. Operations & Safety Dashboards: These dashboards are designed to measure safety and risk. The dashboard can identify places for improvement for hazard identification and even employee training.
3. HR Dashboards: For HR teams, these dashboards are increasingly important to showcase how satisfied employees are. They can help to prevent employee turnover and thereby reduce costs associated with recruiting and training new employees.
From building your own dashboards or using existing solutions provided by software systems like SolveXia, you can better monitor your business in real-time so you can make faster decisions with more accurate and more transparent data.
Software solutions that help you create dashboards can offer you a look at your business’ financial standing in a visual form and can also assist with analysis, forecasting, and reporting. Whether you have tried a dashboard before or are ready to get started, the solutions such as SolveXia are there to help.
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