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Reasons Why You Should Create and Maintain a Financial Dashboard

Posted by Brooke Tajer on May 31, 2016 3:30:00 PM
   

financial dashboardCreating a financial dashboard can give you valuable insight into your business's financial performance. The objective of a financial dashboard is to give you real-time snapshots of some of your business's key performance metrics.

Your dashboard can provide you with critical information and data about your business in one place. You can set it up to show your sales numbers, inventory reports, revenue, expenses, performance, budgets and cash flow. The key is to ensure your dashboard is set up to measure meaningful metrics, allowing you to consolidate information quickly and effectively.

When connected to the right information, your financial dashboard can help you measure ongoing performance, which allows you to make fast decisions before problems begin. Here are some beneficial reasons you should consider creating a financial dashboard.

Time Savings

Many businesses spent time and money generating reports on a regular basis to help them gain insight into various areas of performance. However, using an automated dashboard reduces the amount of time spent generating reports or creating and entering data into Excel spreadsheets to try and track the same data.

Increased Profits

Your dashboard has the power to show you precisely what areas of your business are performing well and which ones are underperforming. When you can see at a glance what areas of your business are generating the most profits and which ones are costing you time and effort for minimal return, it's easier to make a decision about where to focus your attention.

Increased Productivity

You have the ability to set up your financial dashboard to measure performance numerically. Aside from tracking sales or revenue, you're also able to set numerical values on customer service issues, such as the number of customer inquiries or the average speed of answering phone calls, which naturally results in employees working harder to improve their overall performance and results.

Real Time Visibility

Most reports are created using historical data, so you know what happened in the past. However, a financial dashboard can be set up to show you precisely what's happening in your business on a real time basis. Once your dashboard is set up, you can program it to update reports every hour, keeping you informed of progress as it happens.

You can also program your dashboard to automatically display success indicators. For example, you might set it to display green arrows pointing upwards when the metrics recognize a positive trend or increase in results and a red arrow pointing downwards when something's missed your desired performance indicators. When you see something trending downwards, you can act quickly to amend any problem areas before they become major issues.

Creating and maintaining your financial dashboard can be a valuable resource for any small business. However, you shouldn't use your dashboard to ignore your long-term financial reports. Rather, they should be used in conjunction to help you gain a clearer insight into your business's financial health.

Topics: Small Business

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