Business Dashboard: The Simple Method To Track Your Way To Success

Jan 7, 2016, Written by Sue Miley

Business Dashboards

The beginning of the year is a fresh start…a blank slate of sorts. I always want to be organized, have new files, and start the year with any new processes that will help me achieve my annual business goals.

The best tool I have found to make sure you stay on track in your business throughout the year, is the business dashboard.

What Is A Business Dashboard?

Dashboards often provide at-a-glance views of KPI’s (key performance indicators) relevant to a particular objective or business process (e.g. sales, marketing, human resources, or production).

 I recommend two types of dashboards; weekly and monthly.

Weekly Dashboard – is a trend report of the key indicators, that are most important to your business or department, and the information is available on a weekly basis. For example, most of us have a way to track sales weekly, however, we may need to close the month to get reliable gross profit and net profit information.

Monthly Dashboard  – is usually information that is verified and formal through our sales, service and accounting systems.  You may still want to see the trends, however, this information is usually not available until a week or two after the month ends, and may not allow you to act as quickly as the weekly dashboard.

What Type of Information Should Be On My Dashboard?

Here are a couple of examples:

Accounts Receivable – if you watch the aging of accounts receivable, (how long it takes your customers to pay) you can call to collect at the first signs of the invoice becoming past due.  The older the outstanding invoice gets, the harder it is to collect.  The sooner you collect the easier it is to pay your bills.

Sales Trends – if you compare sales against last year you can see if your sales are growing, flat or declining.  I like to also compare sales to a budget weekly.  Last year’s sales may not be adequate to pay for new investments.  Our budgets, or projects, reflect where we need to be in the upcoming year.  The sooner you see your trend shift the sooner you can act on it.  Revenues going up creates a positive energy and momentum.  Revenues going down requires a change of some sort to stop the negative trend.

Gross Profit Margins watching your margins monthly compared to year ago and last month is another key piece of information.  It is also important to watch the margins by product or service category.  You want to understand the line of products or services that is the most profitable and least profitable.  Low margins could mean costs have gone up for some reason or that your pricing model is off.  This may require some digging but getting to the bottom of low gross profit margins can bring more to your profit line than any other action step you can take.

Other suggested key indicators to track:

  • Employee turnover if it’s been a problem
  • Client retention
  • Average $/transaction and # of transactions for retail or hospitality
  • Cash balances
  • Pipeline of work or product orders – how much work has been booked
  • Work in progress balances

The Benefits of Using a Dashboard

Rather than give you a generic list of benefits, let me give you some real examples from real clients (my paraphrasing) after using a dashboard for several months:

I honestly never looked at the accounts receivable aging reports I would get.  It was just a long report with a bunch of numbers.  Seeing it summarized on one page and tracking DSO, I have seen that we are way behind industry standards and have a ton of our cash tied up.  I immediately got the sales team involved to help collect.  We literally collected several hundred thousand dollars in over 60 days.  Now I can watch our DSO and quickly know if we are backsliding.

We are up in sales on our ABC product line because our tracking report keeps it top of mind as a key initiative this year.  It is crazy that just by focusing on it and reviewing sales every week we have made so much progress.

 I never realized how inconsistent my own work efforts were.  After tracking billable hours weekly for a couple of months, I saw that they fluctuated widely.  I had the work to do, I just wasn’t doing it.

By tracking the work in our pipeline, I knew that we wouldn’t be able to get it all out if we didn’t add a person.  Instead of waiting until we are overloaded, killing our team, dropping the ball on some projects, we were able to hire in time for the peak.  This also allowed us to keep saying yes to new jobs and we filled the new person up quickly.

Basically, a dashboard can help you…

  • focus on downward trends
  • gain momentum on positive trends
  • know when to hire people
  • plan your cash-flow needs

…manage the key performance areas of your company.

How Do I Know What To Put on My Dashboard?

All businesses are different, and although there some common key performance indicators of all businesses, many are industry or business specific.

For the items that are key to your business, ask yourself some questions:

  • How do we charge for our products/services?  If it is a product and people purchase one at a time, you may track.  For others it may be truckloads.  If you have a service, it may be by the project or by billable hour.  These components of your sales may be additional statistics outside of just total sales that you want to keep up with.
  • What causes the need for additional staff?  In insurance, it may be book of business, in consulting it might be project hours, and for service industries it may be volume of service calls and technician utilization rates.
  • What are your business pains?  For retail and hospitality it is employee turnover.  In coffee houses it is pastry and food waste.  In restaurants it is food cost.

These are a few ideas of the type of information that might be important to you.  However, this is still pretty general.  If you need help in setting up a dashboard specific to your company, we can help.

Do You Need Some Help?

Some business owners just need someone familiar with dashboards to talk through it with.  Others prefer us to create a dashboard for them.  And some want help for a few weeks to review and analyze it with them after it is created so they are able to use it effectively.  If you would like more information on our services, please call us at 225-341-4147, or email [email protected].

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Sue Miley

Sue Miley MBA, MA, LPC helps small business owners build successful businesses on a foundation of Christian values. After 20 years in business, and 10 years as a Christian counselor, Sue uses a combination of faith, business and psychology to help clients in business and in life.

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