If you have been following my four part series on your Financial Dashboard, you are ready to think about the information that you want to receive and when and how to generate the reports.

In our first example, the entrepreneur received a set of financial statements on the 15^th of the following month – a fairly typical situation but all of that information is historical and out of date (i.e., the executive cannot affect January’s results with information received on February 15^th.)

The second executive received information about last week on Monday morning and although he cannot impact last week’s results (an argument perhaps for daily dashboard reporting) he can affect the rest of this month’s results.

Selecting the right metrics (measurements) is a difficult, but important part of this process.

You don’t want to have too many key metrics that you are tracking on any given dashboard – I recommend no more than five or six and always weigh the cost of tracking and measuring the information against the value received there from.

Finally, a dashboard will likely change over time and as a key pressure or challenge in your company is resolved, that metric may be removed from the dashboard and another that is now a higher priority selected to replace it.

If you long for timely and more accurate information about your business and to become a confident and proactive decision maker, I suggest that you make the investment to implement dashboards and key metrics reporting for your business. If properly planned and executed, it will be a journey of discovery and insight that will pay dividends well into the future.

In the next post of my four-part series I’ll identify five basic rules for the metrics you need to incorporate into your financial dashboard plan. If you’re ready to get your financial dashboard set up, Give us a call right away.

In our experience, a business must establish a foundation of competent staff, documented and tested procedures, adequate controls (policies & procedures) and a culture of consistency before good reporting practices can be established.

Foremost in this process is getting the right people who are competent, properly trained and who know what is expected of them.

Although all businesses have procedures and some level of controls, it is rare to find one where they are well documented and communicated to employees.

Finally, I recommend that you take a step back and think of the culture that you, as the CEO or General Manager has created. Are you consistent in requiring all employees, including yourself, to follow the company’s policies and procedures? If not, you have to start with yourself and establish a culture of transparency, trust and consistency – only then will the foundation properly function to provide you with the kind of information that our second executive enjoyed.

In the next post of my four-part series I’ll quickly review how timing can effect your financial outlook. If you’re ready to get your Financial Dashboard set up, Give us a call right away.

I opened a recent article written for Utah CEO Magazine with a story about two busy entrepreneurs, each trying to manage a busy schedule and maintain a sound financial perspective. One is trying to keep up, and the other uses a financial dashboard to keep an eye on things. Here’s the scenario in part one of a four part series of posts:

The busy entrepreneur sits at his desk reviewing the January financial statements. It is the 15^th of February and he is somewhat frustrated that the reports are so difficult to understand. He knows that they may contain critical information but he has neither the time to research nor the competence to properly analyze it to make it more meaningful. After 30 minutes of reviewing key accounts, he files the financial statements in his 2010 binder and moves on to another important project, fearful that he might be missing something important about his business but hopeful that he is not.

Contrast our first executive with the CEO who arrives at his office at 7:30 AM on Monday morning, opens an e-mail from his Controller and finds last week’s dashboard – a collection of the Company’s key operational and financial measurements in an easy to read graphic format with a one paragraph analysis and explanation from his finance team. In the same 30 minutes, this CEO reviews a high-level overview of the Company’s sales, costs, productivity and financial highlights.

In the process, as he notes some concerning production information, a quick telephone call informs him that the Manufacturing Supervisor, after seeing the same information, researched the problem and has a list of recommendations in order to remedy the situation so that the same results do not happen this week. The CEO approves the Manager’s plan and leaves his office to conduct a staff meeting, confident that he is making good decisions with the information available to him.

If you own or manage a business, you undoubtedly want to operate like the second example but implementing effective dashboards or timely and accurate reporting is easier said than done.

In the next post of my four-part series I’ll quickly review how to set up your financial dashboard. In the meantime, if you have questions about how to better manage your business’ financials, don’t wait for the next post: Give us a call right away.