You can make a financial dashboard your blueprint for success.

by Kelly Deis, Soundpoint Consulting

A good analyst can design and build accurate management reports which cover the components most managers want to track most of the time.

A great architect builds a house that meets the unique current and future needs, priorities and preferences of their client. Similarly, the needs, priorities and preferences of each company are unique to them and should be reflected in their management reports.

As in many things in life – where we place our attention is what will change. But, if you try to focus on too many things at once, nothing receives adequate attention.

For smaller businesses, it has been my experience that monthly financial reports consist of little more than an Income Statement and Balance Sheet. Although most of the information is there, it often doesn’t provide the visual story of where you have been, how you’re trending and whether or not you are going to meet your goal(s). Let me suggest a more useful approach:

Step 1 – Perform a Financial Review

What better place to start? A comprehensive financial review at year-end is a great time to take stock of the financial health of your business. You can’t know where you want to go until you know where you have been.

And, a thorough financial review will point you to where you should set goals and focus your attention in the coming year. How have the key financial elements of your business been trending?

  • Revenues, gross margins, expenses, net margins?
  • Profitability by product group?
  • AR days, inventory turnover, current ratio, debt balances?

Don’t be surprised if the review raises more questions than you have answers. That is not uncommon if you and your business are relatively new to this process. It will get better!

Read about Steps 2 & 3 here… 

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