A quick glance at your car’s dashboard is all you need to check your fuel gauge, speed limit, engine temperature, and RPM when you’re driving down the road. Your car’s dashboard is designed to focus on what’s important and what you need to know to have a safe trip.
What’s on your financial dashboard?
Your car’s dashboard items, if they applied to business, would be called key performance indicators or KPIs. The KPIs of your business vary depending on your business goals and what’s important to you. Common items include your cash balance, how fast you get paid, how much revenue is coming in, and whether you’re making plan. There are literally hundreds of them to choose from. Many of them are not derivable from your financial statements, such as number of orders, client satisfaction levels, and employee turnover.
Would it be useful to have a dashboard of KPIs for your business? Find out what’s working and be alert to what needs focus? Here are the steps to creating a dashboard for your business:
- Decide on the KPIs you want to track. Selecting 6-10 to create and track is a good place to start.
- Select a tool that will provide you with the KPIs in the format you desire. There are many great add-ons to your accounting software that will instantly crunch the financial KPIs for you and present them in insightful formats, including charts, graphs, dashboards, and reports.
- Create any new processes to calculate the new KPIs and enter them into the dashboard app.
- Hold a review meeting to go over the KPIs and determine any action based on the review.