Written by Colombe Corten
No matter its type, an organization must generate financial reports. However, there is a gap between generating these reports and comprehending them. Thanks to financial dashboards, the organization has a comprehensive overall view on its financial status. Financial dashboards are transforming decision-making for businesses by enabling the visualization of key data, often in a graphical format.
Dashboards consolidate a company’s most important performance indicators in one place, offering a real-time snapshot of financial position and helping to inform future planning.
Benefits of dashboarding
Today, walls of numbers are not enough, the management needs graphs and key outputs to understand the context and define the key metrics. An increasing number of companies is integrating dashboarding tools in their core business. Dashboards represent several benefits for the companies:
Dashboards are a good investment: Companies that switch to dashboard experience a 6% increase in their revenue within three months .
Dashboards encourage storytelling: This visualization tool initiates practical conversation and improves the thoughtful financial analysis
Dashboards ensure shared financial comprehension and engagement: Dashboard creates a common language between the members of a company. Moreover, it reminds the level of information that everyone in the organization is expected to be familiar with
Dashboards define measures of success: The process of developing dashboards forces the leaders to decide the firm’s priorities and measures of success.
Dashboards revitalize financial analysis: Instead of limiting financial metrics to an administrative exercise, a dashboard empowers everyone in the company and energizes and internal discussions around finance
Basis of a good dashboard
A good dashboard shows actionable and useful information. It must be intuitive and coherent. Data must be prioritized, and information displayed clearly in a visual hierarchy.
As mentioned earlier, before starting the building of the dashboard, key metrics must be chosen. Financial KPIs must be SMART. SMART acronym stands for :
Specific: the company’s goal and expectations must be clear
Measurable: the chosen KPIs must be measurable to include them in the dashboard
Achievable: the objectives of the firm must be withing realistic capabilities
Relevant: the KPIs must be relevant and adapted to the firm’s goal
Time-bound: the organization must decide on milestones and a timeframe for its goals
Besides aligning on the metrics that matter, it is essential to find the right visualization technology that leverage the organisation’s investment in technology for the defined purpose.
Before the actual implementation of the operational dashboard, a dashboard prototype that everyone can agree on, access, and understand must be build. Indeed, for people to take ownership of data, they must be able to retrieve and understand them effectively.
What have we learned at our clients about financial dashboarding?
At our client, we attach great importance to:
Data cleaning: data cleaning is the most time-consuming process but above all the most essential task when creating meaningful dashboards. The way the people are storing, saving, or registering the data might be different and lead to confusion and wrong conclusion.
Data ownership: every piece of data must be owned and controlled by somebody. By empowering the people and putting them in charge of data, the dashboards are understood and enhanced by the entire company.
Data quality: data quality is closely linked to the two last points. Indeed, data quality is high when employees own the data and are able to manage them correctly. Moreover, the higher the data quality, the easier the data cleaning process.
To conclude, dashboard is an incredible tool to illustrate the key pieces of data. Moreover, they open the door for a more collaborative environment in which data can be accessed and understood by anyone in the organization.