Strategies for Developing Accurate Financial Dashboards

Introduction

Financial dashboards are graphical tools that compile financial data in one central place, providing actionable insights and a comprehensive overview of the company’s financial performance. Accurate financial dashboards give businesses an effective way to analyze and measure the success of their investments and strategies, and identify areas of improvement. When done right, they can inform difficult decisions and propel the growth of a business.

What are financial dashboards?

At its core, a financial dashboard is a visual representation of vital financial information, typically spanning multiple time periods. It acts as a central place to analyze and clearly portray the financial standing of an organization or business. Financial dashboards typically include key performance indicators (KPIs) or metrics such as:

• Revenue
• Expense
• Profit/Loss
• Cash Flow
• Sales
• Gross Margin

Why are accurate financial dashboards important?

Accurate financial dashboards are critical to the success of an organization or business as they enable effective decision-making and financial management. They help organizations track themselves against their competitors, make well-informed decisions, and measure the performance of their investments. In short, accurate financial dashboards enable businesses of any size to accurately track financial performance and grow their bottom line.

Establishing Goals

When it comes to financial dashboards development, goal setting is the foundation. By clearly outlining the objectives of the dashboard, you will help ensure that the data collected is relevant and informative. In order to make sure that your dashboard accurately fulfills the role of presenting an accurate financial picture, there are two key elements that need to be established: objectives and performance targets.

Defining Objectives

When defining objectives, it is important to be specific. Your objectives should identify the areas of financial data you want to capture and present in your dashboard. Consider the areas of data you have at your disposal, and what you hope to convey to your team or company through your dashboard. Some objectives for a financial dashboard can include analyzing financial performance, tracking key metrics, comparing costs or profits across different periods, or forecasting future financial results.

Set Performance Targets

Once you have established the objectives of your financial dashboard, you need to set performance targets. Your performance targets should give you a benchmark by which to evaluate the success of your dashboard. You can use previous results as benchmarks, or goals specify a range of numbers or percentages that you want to hit. Having performance targets in place is essential to ensuring that your dashboard is providing accurate, actionable insights into your financial picture.

Setting clear objectives and performance targets is the first step on the path towards creating an accurate financial dashboard. By outlining the goals for your dashboard, you will help ensure that the data collected is relevant, actionable, and informative.

Gathering Data

A financial dashboard is an important business tool used to track critical success factors in an organization. It should be closely monitored and kept up to date with accurate data in order to measure progress and identify potential issues. To ensure that accurate data is used for the dashboard, it is important to have a strategy for gathering information from reliable sources.

Select Data Sources

The first step in devising a data gathering strategy is to identify the sources that will provide the necessary information. These may include internal reports and documents, industry publications, government data, or other external sources. It is important to select reliable sources in order to ensure that the data used is accurate and up to date.

Monitor Sources Regularly

Once the data sources have been selected, it is important to ensure that they are monitored regularly. This can be done manually by checking the sources on a regular basis and looking for any changes. It can also be done automatically by using software solutions that keep track of changes in data sources and alert personnel when information has been updated. Regular monitoring will help ensure that the financial dashboard is always updated with accurate data.

Building the Dashboard

Once you have introduced the right tools and compiled all your data, you can begin to build the dashboard. With the right approach and best practices, you will be well on your way to creating an effective and accurate financial dashboard.

Arranging Data in an Organized Way

The main focus when creating a financial dashboard should be on organization. Data can be easily manipulated to present the desired image, and the dashboard should lay out all the relevant parameters in a format that is easy to read and interpret. When selecting data, aim for clarity over quantity to avoid having too-large of a time frame that is difficult to analyze.

Each piece of information should be placed in a logical order and labeled properly. Choose a layout and format that allows trends and connections between different datasets to be obvious. One common approach is to use consistent colors, designations, and fonts to indicate the same (or related) data points.

Including Appropriate Visual Elements

In addition to organization, financial dashboards require a range of appropriate visual elements that make it easy to understand the data. Appropriate visuals can include charts, graphs, tables, and other visuals that help the reader grasp the data quickly. Visuals should be used in a way that allows the data to stand out and be easily interpreted.

Dynamic visuals such as line graphs, area graphs, and performance gauges all help to illustrate trends and changes in the data over time. Heat maps can be used to give an in-depth look at trends and are very useful in showing correlations between multiple variables. Static visuals such as pie charts and bar graphs give a quick overview of the data and can be used to compare different data points.

When it comes to visuals, it is also essential to adhere to all corporate branding rules. Keeping corporate colors and logos consistent helps the dashboard to look professional and polished. Colors, fonts, sizes, and other visual elements should be used in a way that causes the data to pop off the page.

Automation

Automation is one of the most important strategies when it comes to developing accurate financial dashboards. Automating processes and having proactive alerts in place can help ensure that the dashboard data is up-to-date and reliable.

Utilize automation technologies

When it comes to automating processes, it is important to make use of the latest technologies available. Automation technologies such as BPM software, robotic process automation, and predictive analytics can be extremely helpful in setting up a reliable and accurate financial dashboard. These technologies help to streamline and automate processes so that the data is always up-to-date. This can help to eliminate human error and increase the accuracy of the data.

Introduce Proactive Alerts

Proactive alerts can be extremely helpful in ensuring the accuracy of the financial dashboard. These alerts can be used to alert users when certain data points change or when certain thresholds are reached. This can help to ensure that the data is always up-to-date and reliable. Additionally, it can also help to eliminate any potential for errors that could arise from manually updating the data.

• Utilizing automation technologies can help to streamline processes and eliminate potential errors.
• Proactive alerts can be used to alert users when certain thresholds are reached or when data changes.
• Incorporating these technologies when developing a financial dashboard can help ensure its accuracy and reliability.

Reviewing Dashboards

Effective financial dashboards provide organizations with a simple, high-level summary of its financial performance, making it easier to analyze information quickly. As such, it’s essential to review dashboards regularly to ensure they’re displaying accurate and up-to-date information.

Check Accuracy of Data

When reviewing dashboards, it’s important to start by verifying the accuracy of the data that’s being reported. This could include double-checking that data is correctly populated from the source(s) in the correct format, ensuring all calculations are conducted correctly, and validating that the data is being presented correctly. Identifying any errors or inconsistencies here will help ensure the dashboard is providing accurate insight.

Update Information as Needed

In addition to checking for data accuracy, it’s important to review any changes that need to be made to the dashboard to ensure it’s displaying the most up-to-date information. For example, if an organization has launched new products or services, these should reflect in the financial dashboard. Taking the time to review and update dashboards accordingly can help organizations stay current and on top of their financial performance.

Conclusion

Developing financial dashboards for tracking and analyzing business performance is a critical component to ensure a successful business operation. With a financial dashboard, businesses can more easily monitor the performance of their investments and the costs associated with operations and determine if their strategies are actually working.

In this blog post, we have discussed various strategies businesses should put in place when it comes to developing accurate financial dashboards. Specifically, these strategies include: collecting data systematically and timely, defining KPIs for the dashboard development, securely storing the data, and ensuring data accuracy. Following these strategies can help businesses implement a successful financial dashboard that gives clear advice and suggestions towards their business direction.

Summary of strategies for financial dashboard development

In summary, the essential strategies for developing accurate financial dashboards include:

• Collecting data systematically and timely
• Defining KPIs for the dashboard development
• Securely storing the data
• Ensuring data accuracy

Highlighting the importance of accurate financial dashboards

Accurate financial dashboards are a valuable asset to any business and should not be taken for granted. With high-quality data and innovative visualization, financial dashboards can provide a valuable insight into the performance of the business and provide insight into what strategies should be used to improve it.