All businesses have a goal of tracking the results of their efforts. Hence, a financial dashboard provides ease and actionable insight.
Spreadsheets are a traditional and iconic tool used by countless finance professionals and departments. Indeed, spreadsheets became a core part of such departments. However, such a tool often lacks in delivering actionable insight and convenience. Fortunately, a financial dashboard provides those factors that a spreadsheet can’t provide.
Know the factors affecting employee performance
Definition of Financial Dashboard
In simple words, a financial dashboard enables businesses and financial teams to see the financial status and performance of their organization. The dashboard does so by tracking and analyzing the company’s performance.
Spreadsheets often lack data visualizations. Yet, what makes a financial dashboard better is it visualizes the data, unlike spreadsheets. As result, finance departments can easily track the financial performance of the company. Furthermore, it also provides those insights in crystal-clear detail.
Types Of Financial Dashboard
There are various types of financial dashboards. Each type has a specific area of analysis. This makes the data easier to organize and gain actionable insight. On a side note, do not put too many KPIs into one dashboard. Why? You may end up causing more harm than good.
Read on to see the most common types of financial dashboards. Check out to see what tool suits best for the needs of your company.
Profit & Loss
P&L for short summarizes the revenue, expenses, and costs acquired throughout a fiscal year. It is a very effective tool that tells you whether your organization gained or lost revenue for the whole year.
Moreover, it also outlines the reasons why the business made or lost money. Furthermore, a P&L enumerates the costs that your organization could reduce to increase profit margin, etc.
This dashboard focus on your current business’ cash flow situation. If you want to determine if your company can afford its short-term financial liabilities and debts, this is the key.
You must include these two crucial metrics for dashboards. First is the current ratio. It is a liquidity ratio that measures a company’s ability to pay short-term obligations or those due within one year. Meanwhile, you must also include a quick ratio. It measures a company’s capacity to pay its current liabilities without needing to sell its inventory or obtain additional financing.
This is also called a profit margin analysis. It pulls financial information from every area of the organization. Moreover, it enables you to manage budgets and view income statements. That is made possible by the CFO scorecard’s simple, streamlined place.
This will give you a detailed view of how your business must spend its revenue. Including these four metrics will make this dashboard useful:
- Return on Assets
- Working Capital Ratio
- Return on Equity
- Debt-Equity Ratio
Accounts Receivable & Accounts Payable
Also called AR & AP, this financial dashboard helps the company understand its status in terms of accounts receivable and payable. Two crucial metrics of this dashboard are accounts payable turnover ratio and accounts receivable turnover ratio.
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