Simplify Your Life with a Financial Dashboard

As a business owner you know how to make your product, you also know how to find opportunities that will make your business grow, and you know how to sell. Being honest, do you really know if you are doing well by looking at your financial statements? Some business owners have the perspective, “if there is cash in the bank and I am paying my bills, I am good.” There is more to it than that if you want to have sustained growth. While accounting and finance may not be your area of expertise, you must keep your eyes on the numbers to truly know how your business is doing.

The P&L (profit & loss), the balance sheet, and the cash flow statements are the basic financial statements to be reviewed monthly. Also, they should be prepared and as soon as possible after the close of each month. It is not that unusual for me to speak with business owners and get some interesting answers to the following questions:

  • Are your financial statements prepared on a timely basis?
  • Are they free from error?
  • Does your controller tell you, when reviewing the October P&L, “Well, I had to make some adjustments to the September results, so September was a little better than we thought, but October isn’t so good”?

It’s not terribly unusual if you either don’t get routine, timely financial statements, or if you don’t trust them.

In addition to the basic financial statements, you also need to have a few reports that provide important information about the business operation. It may be a little different for each company, but I’ll bet you want to know a few things every month like:  Who’s my biggest customer, and how profitable is that customer? Which customers are 10% ahead (or behind) last year? What sales are in my pipeline? What’s my cash position?  Where will my cash be at the end of the month . . . and will I have enough cash to cover the next 90 days or when my taxes are due? What’s my gross margin this month, as compared with where I thought it should be? How am I doing compared with budget?

While producing the basic financial statements monthly is a first step, the capacity for understanding and acting on financial information will depend on how the information is presented. This is where financial dashboards come in. Financial dashboards illustrate key pieces of data, often in a graphical format.

Why financial dashboards matter: Graphs and visuals encourage storytelling, a sign of active interaction with the numbers. Thoughtful financial analysis requires as many words as numbers. We encourage organizations to highlight meaningful variances — significant departures from budget — in financial reports. Variance analysis goes beyond identifying financial trends. Financial dashboards effectively communicate performance on key metrics to the business owner, investors, and anyone else who needs to stay in the know. Your organization relies on multiple data streams, and dashboards lets you blend them all into a powerful, automated financial report. Following are some Key Performance Indicators (KPI’s) that should be included in your Financial Dashboard:

  • Revenues
  • Cost of Goods Sold
  • Expenses
  • Net Profits
  • Liquidity Ratios
  • Debt Ratios
  • Profitability Ratios
  • Efficiency Ratios
  • Value Ratios

You may have started your company knowing what you needed to know. However, if you’ve grown . . . or if you’re struggling to make a profit or improve it . . . chances are that the information you’re getting is not really helping you now. So the question—“How’s my business doing?”—is simple. The answer can also be simple if you are receiving reliable and timely financial information, complemented with a good Financial Dashboard.

If you would like to learn more about Financial Dashboards, email me at to schedule a complimentary session.

Make it a great day!!

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