Can you imagine driving a car without a dashboard? No speedometer, no gas gauge, no idiot lights. How about driving without GPS? I am personally spoiled with my phone’s GPS. I can’t imagine driving in an unfamiliar area without it.
In much the same way it is important to know the speed, direction, fuel level, and other performance indicators of your business. Even early warning lights play an important role. Running an overheated business engine can lead to serious damage. And no matter how fast you go, if you are headed in the wrong direction, you won’t get to your destination.
Most businesses use a combination of traditional financial statements (income statements and balance sheets) and spreadsheets to monitor performance and progress. Unfortunately, traditional financial statements can only tell you where you are now, but cannot tell you where you are headed and how fast you are going, which is the most important information for decision making.
All large companies and some small businesses do some form of basic analysis to understand their trends and directions. This can be very time consuming and when done well requires a good understanding of analytical processes. The cost for doing this work is usually quite high and for that reason most small businesses skip it or do a very abbreviated version.
This is where financial dashboards come to the rescue. They can make the analysis process very quick and inexpensive and can provide insight you cannot get in any other way. I will be using the Corelytics Financial Dashboard as my point of reference because that is the dashboard we have built and sell to small businesses (under 300 employees). This is also the dashboard being used by the University of Washington, Syracuse University and a growing list of other universities as a teaching tool and as the basis for research projects. The research done by participating universities becomes input to the business intelligence included in the dashboard.
There are other dashboards in the market, but our research has shown that Corelytics is the only one that includes industry benchmarks based on current data derived directly from accounting systems. More importantly, all companies should be using an analytical dashboard as part of their routine monthly management process to communicate with their team and to fine tune their progress. This is the best way to get the whole team on the same page and pulling in the same direction.