Whatever industry you work in, understanding the financial aspect of your small business can be quite overwhelming. You may get regular reports on what the company is doing; however, it may not be something you can easily understand. This is precisely where financial dashboards come in and why they are so critical to the success of your company.
It is vital as a part of any business that you thoroughly understand what your financial numbers mean. You also need to be able to leverage that knowledge to improve your success further. Discover why financial dashboards are so essential and how to get yours started.
Tell the Story of Your Business
Even though the financial aspect of your small business is mostly numbers, you also need words to help tell the story. You want to be able to understand the factors that lead to a lower profit margin last quarter. Your employees must comprehend practical steps to change the profit margin growth in the next quarter. By creating a financial dashboard, you tell the story of how the monetary side of your company is ebbing and flowing.
Brings Equality to the Table
One aspect of the financial dashboard is helping everyone on the management team of your business get on the same page. When it comes to admin team of a company, all members come from different backgrounds. They may have a wide range of experience across the table. Sometimes it is hard for those minds to meet when they do not have common ground. Working with a financial dashboard helps to bring the common ground needed to forward the momentum of your company.
Define What Success Means to the Company
What does success mean in terms of where your company is headed? Do you have this mapped out? Do you and your management team understand what it means to be successful in the business? Implementing the dashboard makes this happen. The team defines what success looks like, and they can put action steps in place to help the company achieve the goals set forth.
Specific to Your Company
Not all companies are created equal when it comes to goals, finances, and steps to achieve success. Creating a financial dashboard allows you to set these items specific to your company’s vision and your industry. It works to align all goals according to what you wish to see the company do in the future.
How to Implement Your Financial Dashboard
As you understand the value of a financial dashboard for your company, it’s time to implement the process. Keep these tips in mind to assist you with making your dashboard work for you, not against you:
- Make the dashboard one you can always maintain. There are different options available such as Microsoft Excel.
- Give it some time to find what works best for your company. Consider piloting a version of your dashboard for six months to a year. This helps to work out the best system for you.
- Ensure you have a target set for your performance so that you can tangibly measure where the company is at.
- Develop a team to assist with finding what metrics you need to track. This needs to be a team that can understand the key drivers and “choke points” within your company and what is important to track regularly
- Assign at least one number or measurable to each team member. Every high-performing individual likes to strive for something. It’s also much easier to determine success and failure for a position when clear metrics are attached to it.
Implementing a financial dashboard for your company is critical to ensuring you know where your business is going, when it will get there and being able to pro-actively identify roadblocks before they come to fruition. The dashboard gives you tangible ways of measuring where the company is now, along with where you want to see it in the future. This also gives you a comprehensive way to gather everyone around the table to set goals and a vision for success. The dashboard is a vital part of planning the financial future for your company.