When it comes to reporting, financial dashboards have emerged as an important part of the process. Acting as a powerful data visualization tool, a financial reporting dashboard--such as one powered by Excel--shines at showing key pieces of data, visually telling a story and purposefully informing business decisions. For financial professionals working in any industry, dashboards can be the key to effectively understanding and presenting a company's overall health and vision for the future.
Keep reading to find out how financial dashboards in Excel support reporting processes and to learn more about the top three financial dashboards and models that enhance your reporting processes.
Essentially, financial dashboards consolidate a company's performance data into a single picture. They enable both financial professionals and decision makers across the organization to easily understand what's going on with the business.
The most effective dashboards draw meaningful data correlations, deliver actionable insights and/or highlight variances in financial trends. What's more, they show key financial performance indicators (KPIs) in real time so viewers can quickly prioritize their areas of focus and take action.
According to Khurram Chohan, CFO of TogetherCFO, "Having a clear financial dashboard is the key to making better business decisions and being able to act faster."
By providing a common visual language between finance and non-finance audiences, a financial dashboard also helps foster a culture of collaboration, transparency and accountability across the organization. And that's increasingly important because the financial planning and analysis (FP&A) team is evolving into a central hub for measuring the health of a business.
As Marjorie Adams, CEO of Fourlane, advised businesses, "Don't just track finance, every department's numbers have an impact, so collect them all."
(Check out The Ultimate Guide to Corporate Budgeting to help you better put finance at the heart of everything your company hopes to achieve.)
The demand is growing for consolidated data and strategic insights across business units and functions. This means that FP&A professionals need to get savvier about predictive analytics and performance management. They also have to adapt and learn quickly from more holistic views of historical data--integrating a company's past, current and projected numbers.
Justin Goodbread, CEO of Heritage Investors, explained, "The goal is to have your financial reports provide a story that giv[es] you a complete picture of your company's past, present, and future financial health."
The good news is that a financial dashboard makes it easier and faster to aggregate and analyze financial data. It's empowering finance teams to focus on key company metrics and to understand how they're affecting the company's bottom line and other crucial KPIs. Beyond traditional finance metrics, it's giving them greater visibility into the health of the business as a whole.
Indeed, with the growing influence of the finance team over high-level business decisions, being able to analyze a company's "big picture" is more critical than ever. But how exactly do you create clear and strategic dashboards to effectively track and evaluate your entire organization's health financially? It comes down to building the right dashboards--with the financial metrics that truly drive an organization's overall success:
Here's how to elevate your reporting and analysis with these three critical dashboards.
Arguably, finance's most important role is proactively measuring a company's financial situation and overall sustainability. Generally speaking, business health dashboards should evaluate both short- and long-term financial metrics (based on a company's short- and long-term goals). And to ensure full transparency and visibility, they should also include budget to actual variance analysis.
There are several critical areas to consider, but here are the most important metrics for building a business health dashboard:
Finance teams (especially with subscription-based business models), need to measure how existing customer relationships are impacting the bottom line. This enables finance leaders to help sales and customer success teams understand where they should focus their efforts and resources.
Beyond the numbers, customer health data provides insight into the stability of the company's overall customer service function. After all, it's always cheaper to retain an existing customer than to sign a new one.
Here are the most important metrics to include in a customer health dashboard:
Without a doubt, a company's most important asset is its people. Employee trends and behavior affect a company's bottom line and are vital for finance professionals to measure. But effectively tracking and acting on employee health findings means working closely with HR (which also underscores the significance of cross-departmental transparency and collaboration). Fortunately, modern FP&A platforms can make it easy for finance professionals to sync HR data with financial data to determine what the numbers mean for the business.
Here are the most important metrics to include in an employee health dashboard:
From tracking the bottom line to evaluating customer satisfaction and employee happiness, a financial reporting dashboard can offer invaluable insights for the entire company.
While individual metrics might mean different things to different organizations, connecting the dots between the key drivers of a company's health is critical to seeing its big financial picture. It doesn't matter if you're doing so with a financial performance dashboard in Excel or another platform, the goal remains the same.
The right financial dashboard can be the window to more strategic, integrated and dynamic views of the business. And with the help of Vena, building and using an Excel-based financial dashboard has never been easier.
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