Written by Colombe Corten
Introduction
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 [1].
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 [2]:
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