Similar to the dashboard of an automobile, which allows a driver to monitor the major functions of a car at a glance, a financial dashboard provides insight into how your business is doing by looking at trends, comparisons, and other factors. For a business, a financial dashboard shows you how your business is performing and which areas need your attention. Learning how to use dashboards to your advantage can improve the health of your business and better your bottom line.
The Standard Dashboards
There are multiple options to choose from when establishing your financial dashboard. Every business is unique and so dashboards do tend to vary. At GrowthForce, we provide our clients with a set of standard graphs and then create custom charts to include the most important Key Performance Indicators (KPIs) that are specific to their business. The standard KPI dashboards include Gross Revenue, Gross Profit, and Net Income. Along with the standard dashboards, GrowthForce reports the actual data points for the year, the trend line, and 6-12 personalized KPI graphs for each business. In addition, GrowthForce clients using Insperity Reveal™, a web-based financial management product that automatically syncs with their QuickBooks file, are able to gain real-time financial intelligence and actionable alerts from an easy-to-read online dashboard.
Selecting Your KPIs
Which KPI is right for your business? It all depends. KPIs should look at key business metrics related to the sales pipeline, customer satisfaction, employee productivity, and cash flow. Looking at these metrics together helps measure the health of a company not only from a financial standpoint, but also from the perspective of the company’s customers, internal processes, and human resources. Which KPIs a business chooses to focus on depends on what type of business they are, what industry they are in, and what information is most beneficial. Here are some examples:
Product Based Business
A business that sells goods and products should be looking at their sales pipeline as well as customer satisfaction. Identifying sales trends can help a business determine if there are times during the year in which a product is in high demand. This helps a business make timely and strategic decisions, such as improving distribution processes as well as marketing and sales strategies to match the high demand.
For a service-based business, employees are the most important assets. This also means the largest expense for a service business is labor. Service companies should focus on KPIs related to tracking labor. These could include how many hours of a 40-hour workweek each employee spends on client time, or how long it takes to get paid from each client.
Using Your Dashboard Data
In addition to reviewing standard financial reports, every business can benefit from incorporating financial dashboards. Analyzing business trends and Key Performance Indicators provide a business with data that can be used to make important business decisions. Whether you are looking to increase profit margins or make a business investment, you can use your dashboard to make informed decisions that will in time, benefit your company and your bottom line.