What does your “Financial Dashboard” look like? Do you have a “Financial Dashboard” that you use to monitor your business? The purpose of the Dashboard is to monitor the success or lack of success of the business. The ratios that you monitor should be directly relevant to you and your business specifically.
Personally for a lot of clients I really like to start the measurement on the current year to the immediate previously year. This gives a reasonable apple to apples comparison, with any exceptions known. Focusing on:
- Revenue
- CGS
- Gross Margin
- Expenses
- Operation Profit
- Net Profit
Monitoring cash flow is also important. There also needs to be a focus on the aging of the accounts receivables. Aged accounts payable should also be available.
Each client where we are working with them on their dashboard has their own focuses. I have to admit that I am not a huge fan of looking at the industry averages for comparison purposes. A focus on gross averages from around the country typically does not have any regional nuances available. Having them available can be a helpful in a broad sense, but I don’t use them for the micro analysis.
How do you use your “Financial Dashboard”?