Financial reporting and the use of performance metrics dashboards, do you know why you need them?
If you graph cash flow and its elements, such as, A/P, A/R, Inventory, capital expense, bank accounts, etc. for the last two years, it becomes much easier to project 12 months into the future and see trends that may have happened in the cash flow area.
A graphical representation of cash flow is one of the most important tools for an executive and should be included on any performance metrics dashboard.
A spreadsheet should also be used to translate the accounting cash flow statement into a rolling 12-month history and a 12-month future cash flow measurement tool.
A graphical cash flow rolling historical can make future projections easier to complete. These tools can be critically important for growth, seasonal trends or shrinking companies.
Many companies have died in their growth because they did not track cash flow or the needed cash flow resources.
Some elements that could be included in a graphical dashboard are shown below. Graphs are much easier to review and assess the company performance than a series of data tables. The author suggests the following graphical metrics:
- Overall Cash Flow
- Contribution Margin (CM)
- Break-even Dollars and Units
- Productivity Index:
- Revenue per full-time employee. ($Rev/FTE)
- Contribution margin per FTE (CM$/FTE)
- Net income per FTE: (NI$/FTE)
- Net Income
- Average Sales Price/Unit
Rifle vs. Shotgun, 80-20 Customer Gold Program TM, Dashboard elements were key concepts
Nike, Owner, Bedouin Suites, Canada. Learned about methods to improve his companies business including the Rifle vs. Shotgun, 80-20 Customer Gold Program TM, Dashboard