Implement a financial management dashboard to help prevent untimely and unreliable financial reports.
When an organization’s financial statements are not prepared on a timely basis or if financial statements are unreliable, it’s normally a “red flag” that there are issues with management, the accountant or bookkeeper or possibly serious financial troubles.
Even if an organization is financially healthy, unreliable financial information casts doubt on the credibility of those involved, whether they are management, auditors, creditors, investors or stockholders. These stakeholders need reliable, factual and realistic information to assess the performance of the organization in order to make wise decisions.
What are the adverse effects of untimely and unreliable financial statements?
A financial statement with unreliable information defeats its purpose as it should help answer critical questions in any areas of financial position, results of operations and cash flows.
At the same time, if financial statements are presented to decision-makers with information that this outdated or is no longer relevant, critical decisions may be flawed. Decision-makers need accurate and timely information in order to make sound decisions and to take the right actions.
In essence, untimely and unreliable financial information threatens not only the credibility but the viability of an organization.
Thanks to contemporary technology there are solutions. The financial management dashboard is one such solution that can put an end to financial statement woes.
What is the financial management dashboard?
A financial management dashboard is a tool that displays pertinent KPIs (Key Performance Indicators) for effective monitoring, reporting, and evaluation of financial results. It is ideal for monitoring revenue, expenses, and even budget variances. It allows the organization’s management or Board to comprehend and analyze the status of the organization through a clear visualization of data.
What are the types of financial dashboards?
A good financial dashboard combines data precision with visualization so that users can see the results and trends of the organization’s performance.
Financial dashboards come in various types, depending on what information users need to focus on, whether it’s profits, cash management, customers, vendors or financial performance in general. Effective financial management dashboards are tailored to each user based on their individual needs.
Depending on the size or complexity of the business, one or more of the following types of dashboards could be helpful:
1. AR & AP Dashboard – itemizes where the company stands as per its receivables and payables. Helps with cash flow management since amounts due from customers are highlighted as well as amounts due to vendors. Example: Data Bear’s Power BI Dashboard & Report
2. Cash management dashboard – focuses on the organization’s current cash flow, which is useful to determine whether or not the company can effectively manage its obligations. Example: Oracle’s Smart View
3. CFO scorecard – collects financial data from the organization’s many data streams and KPIs. It helps the CFO focus on what is important and promotes critical thinking. Trend analysis, budget variances and exception reporting are key features. Example: Credit Union by iDashboards
4. Finance performance dashboard – provides critical financial performance data for the non-financial professional such as the CEO. This dashboard highlights the major metrics that influence the overall health of the organization. Example: Sisense Financial Data Analytics
5. P & L – summarizes expenses and revenues, demonstrating if the organization gained or lost revenue, why it lost or made money and which costs could be reduced to increase profit. Example: Sensdat’s Power BI P&L and Balance Sheet Dashboard
Top Financial Dashboards in 2019
Financial dashboards are sprouting up all over, giving businesses a wide variety of choices so they can pick the one that best meets their requirements. Here are some of the top dashboards:
· Birst – Infor Company’s Birst is an analytics solution and networked business intelligent that runs on the web. It helps in decision making by connecting insights from different teams.
· Dundas BI – Dundas Data Visualization’s Dundas BI is a data visualization and business intelligence platform that is browser-based. Aside from integrated dashboards, it incorporates data analytics and reporting tools.
· IBM Cognos Analytics – an upgrade of Cognos BI which adds cognitive guidance, visualization, and web-based interface.
· Periscope Data – a business intelligence app that keeps data in an interactive dashboard, and with scorecard and dashboard functionalities.
· TARGIT Decision Suite – an analytics solution and BI that provides dashboards, visual data discovery, reporting and data discovery tools.
Business owners, management teams and department heads can make the most of dashboards if they have a basic understanding of the data. Using the latest technology, making the dashboard
user-friendlier is simpler than ever. Users should not be intimidated by graphs and charts but rather should be able to choose the visualization tool that is understandable and meaningful.
Financial management dashboards are one of several solutions for untimely and/or unreliable financial statements. Other solutions, to be discussed in future articles include
Cloud accounting solutions
Bank integration with accounting software
Up to date accounting policies and procedures
Outsourced CFO and controllership services