Financial dashboard example
Why is a financial dashboard useful?
Revenue performance is the lifeblood of any business and is important to both team leaders and team members. Monitoring high-level financial metrics will ensure understanding and awareness among team members leading to better decisions for the business as a whole.
As a CFO, you are responsible for understanding and accurately reporting the company's financial health. This involves assessing liquidity and risk and planning current cash flow accordingly. Tracking revenue movements and profit allows you to make sound recommendations about the right time for product diversification or a business pivot.
This dashboard takes key financial metrics to deliver an overview of the company’s liquidity against monthly performance. It’s meant to increase visibility of financial indicators so that the various teams can adjust objectives and strategies to contribute to the company’s continuous growth. It’s meant to serve as a starting point, so consider adding business specific metrics to make it bespoke to your needs.
Who is a financial dashboard for?
A Chief Financial Officer (CFO) and the wider business.
How can a financial performance dashboard help you achieve your business goals?
As a CFO you monitor revenue changes, track business expenses and plan future growth.There are many calculations and forecasting exercises you perform in order to keep the company’s finances in check, but this dashboard focuses on communicating those high level growth or risk indicators. Maintaining a balance will ensure profitability. Also, it’s meant to easily communicate the company’s financial performance with team so that they can make informed decisions to boost the company’s financial health. For example:
Scenario 1: Have you noticed that your monthly cash burn rate is higher than your revenue month over month?
Action 1: Revise your expenses–you’re spending money faster than you are making it. If it’s a temporary situation due to new hires or other short-term investments such as buying new office furniture, you should bounce back shortly. Keep an eye on it and monitor if the situation improves.
Action 2: Optimizing for profit is not all about reducing expenses; you could look at increasing revenue. Check your sales cycle length–there may be opportunities to convert deals quicker and accelerate revenue.
To get a snapshot of the company’s financial health, keep an eye on the quick ratio. It shows whether the company is able to cover its short-term commitments and achieve growth. Interpreting it the right way, will differ based on the industry and the maturity of your business. For example:
Scenario 2: Are you a one year old SaaS business, with a quick ratio of 1?
Action: In general, young companies can achieve quick growth through strong sales, marketing and other customer acquisitions channels, creating high quick ratios. Focusing on your sales and marketing strategies ensures you attract enough customers in these early stages so that you can scale later.
Scenario 3: Are you an ecommerce business with a quick ratio of 1?
Action: Consider the context of your business. If you have large amounts in accounts receivable which are due for payment after a long period (say 120 days), and essential business expenses and accounts payable due for immediate payment, the quick ratio may look healthy when the business is actually about to run out of cash. In contrast, if the business has negotiated fast or cash payments from customers, and long term payments from suppliers, it may have a very low quick ratio and yet be very healthy.
On a monthly basis, there are a few metrics which will give you an indication of how track against your business goals. It’s also a good opportunity to get an overview of how marketing costs and sales leads will impact revenue. For example:
Scenario 4: Has your lead velocity rate been increasing reaching the highest it’s ever been and you’re ahead of last month’s revenue?
Action: Your sales team is converting customers very efficiently, so think about reinvesting some of the revenue back in the business or even hiring more sales reps, if your current team is stretched.
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