Financial Dashboards: The Key To Better Data-Driven Decisions

Posted on:  February 11, 2021

Finncial Reporting It’s important to be able to see and understand what is happening within your organization, along with what matters most to you. Dashboards are vital to providing clear visibility of a business’ financial state of affairs and placing it directly into the hands of decision-makers.

What Is A Financial Dashboard?

A dashboard is a customizable, financial information management tool that visually tracks, analyzes, and displays key performance indicators (KPIs), metrics, and critical data points to monitor the health of an organization, department, or specific process. Dashboards should be a window into the complete and accurate picture of your company’s finances. The best financial dashboards go beyond just giving you a simple visualization of financial metrics. They should enable finance and accounting teams to explore consolidated, real-time data in any direction, right from the dashboard itself. This not only streamlines your financial reporting but puts the power of sophisticated data analytics into the hands of your finance team for advanced budgeting, forecasting, and planning. Giving them the tools they need to make the best data-driven decisions.

How To Create Meaningful Dashboards

Dashboards are only helpful if they provide meaningful information to your team. The data must be easy to read, understand, and allow decision-makers the ability to improve the performance and the profitability of their business units.
  1. First things first. Dashboards can be displayed in many different formats. But before you begin deciding how best to present your metrics, you need to determine which metrics are best to monitor.Some organizations make the mistake of thinking their KPIs are static and continue to use the same reports and dashboards year after year. In all reality, KPIs are ever-changing. This means you should be monitoring the indicators that most affect your business today. It’s recommended you review your KPIs quarterly to ensure you are measuring the most important ones to make the best decisions within your company. The key to success is a consistent review and continuous improvement.
  2. Know your audience. When deciding how best to format your financial dashboards, it’s important to remember that everyone sees information differently. For the typical accountant, numbers tell the story. While, for others, graphs and dials are the best way to visualize data. So be sure to lay out your dashboard with each department’s preferences in mind.Remember, indicators only work within the context of other numbers. Therefore, be sure to include historical totals and trends, along with your actuals. Without context, a number may look fine on the surface, but when compared to last year, could be alarmingly off.
  3. Too much information can defeat the purpose. Don’t over-saturate your dashboards with too much data. It’s been proven that the human mind won’t internalize and comprehend information when too much data is present. Instead, focus on the key information that is absolutely vital. Experts recommend no more than 5-9 graphs or dials on one dashboard.You will also want to consider font sizes and colors, as they have an effect on your audience. For example, text in a green color may convey that everything is on target when it may not be the case, or if a graph label has a larger font size than others, it may be subconsciously construed that that graph is more important than others. With this in mind, be sure you are intentional in the selection of your font, colors, sizes, and graphics to ensure you convey the information clearly and accurately. Be careful about trendy dashboards that have attractive layouts and color schemes, but trade functionality for aesthetics.

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