Is Your Check Engine Light On 556

Feb 14, 2009

 When we drive a car we take it for granted that our dashboard is set up to tell us most of the important things we need to know to have a safe trip and arrive at our planned destination. When you look down at your car's dashboard, you can quickly determine how the vehicle is functioning and receive alerts when something is not working properly. You would still most likely be able to get to work or to the mall if your dashboard was not working, but imagine how much more difficult and uncomfortable it would be. When I was in college I had a truck with a broken speedometer. Since I didn't know exactly know how fast I was really going, I managed to rack up a couple of speeding tickets and I also got honked a couple of times for going too slowly.  

I think we all can agree that driving with a useful dashboard just makes sense. If it makes so much sense to drive a car with a dashboard, then wouldn't it also make sense to help drive your business with a "financial dashboard" that gives you concise and timely information about your business? Don't get me wrong, a financial dashboard does not replace a good set of financial statements and other detailed reports. However, a properly designed financial dashboard will summarize this data into Key Performance Indicators (KPI's). Dashboards are essentially snapshots comprised of charts and tables of your company's KPI's such as sales reports (daily, monthly, year to date), cash on hand, operating cash flow, profitability, profit margin, back orders, inventory levels, days sales outstanding, etc.

Often times when I look at a company's financial reports, what I find is that income statements run on for two or three pages listing nearly every account in the general ledger. Balance sheets and cash flow statements are also generally not well designed. As a result, business owners are frustrated that sometimes they get too much information and at other times too little information. Think about the KPI's that are vital for your business. Next, have your staff develop a financial dashboard that includes all of these KPI's so that you can quickly see how your business is performing and where you need to focus your attention to help grow your company and improve cash flow and profitability.

If you think that your company would benefit from a financial dashboard, please give me a call.  The initial diagnostic review is free. There is no cost or obligation to you.

Please feel free to call me with any comments, questions or suggestions that you may have. My office number is 813-994-0416 and my cell phone number is 786-281-4527.



A collection of books from B2B CFO® to help any business succeed. Read the first chapter from books, including the Wall Street Journal’s book, for free.