CFO dashboards are the workhorses of the finance team, keeping all selected finance metrics in one place so everyone is informed about the company’s financial health and assisting everyone to manage the budget plan. They help the CFO and finance team share valuable information about financial performance because they make the complex understandable.
The many styles of graph embedded in them help people see financial performance at a glance such as comparing actual versus budget or available cashflow in colors and lines. The dashboard is an ideal communication device for accountants because they can be purpose built and they don’t have to worry people seeing what they shouldn’t be seeing. CFO dashboards highlight vital business performance information and are the perfect tools to build rapport with the rest of the business and help the finance team become trusted advisors.
Now with the combination of Business Intelligence (BI) and FP&A software, CFO dashboards are a useful way to also include operational performance insights. The BI platform enables business users to pull all data from the ERP and other data areas into one source of consolidated data so real-time dashboards can contain ratios and KPIs relating to the entire business, or specific measures about finance, operations and sales.
The Phocas BI and FP&A platform connects all your data so you can build financial dashboards of any nature. With automated data flow and endless dashboards, your people can quickly gain actionable insights about business performance.
Here are three CFO dashboard examples showing how consolidated data has been used to monitor financial KPIs and day-to-day operational activities.
Current month metrics aka financial dashboard
Current month metrics is the name that our example company, Smart AutoParts, has given its financial dashboard built in the Phocas BI and FP&A platform.
The dashboard includes five key measures from the company’s profit and loss statement (total revenue, total cost of goods sold (COGS), gross profit margin, total operating costs and net profit margin). As well as the total monthly figures for each of these important metrics, the financial dashboard compares these totals to the previous month and the budget target for the month. An arrow up or down shows last month’s variance as well as the budget variance and the color shows the severity of the variance. In this example, yellow indicates a variance between 0-10% – not much change – green and red is used if the variance is greater than a 10% shift – good or bad . Users in Phocas can the adjust these threshold based on their company’s financial reporting targets.
In this financial dashboard, there are a couple of troubling signs which are the operating expenses increasing by 12% from the previous month (even though they are within the budget expectations) and the net profit margin decreasing by 30%. The benefit of having a financial dashboard like this one helps the CFO and finance team make corrective action immediately. From the financial metrics in the dashboard they can drill into the transactional data to find what is blowing out the operating expenses.
As well as the monthly figures highlighted, the dashboard also shows the dynamic profit and loss statement year to date and compares the first nine months of the year actuals to the same period in the previous year as well as the budget figures. The cumulative totals are also set-up with comparative percentage changes so the CFO and finance team can quickly see what revenue and expenses are trending up or down.
CFO KPI dashboard or ratio dashboard
As Smart Auto Parts is a wholesale distribution company, the above dashboard has key ratios that are pertinent to the inventory dependent business.
Asset turnover is a financial ratio that measures how well Smart Auto generates sales revenue from its auto parts (or assets). The asset turnover ratio is calculated by dividing Smart Auto’s net sales (revenue) by its average total assets. The ratio explains how efficiently Smart Auto is using its assets to generate sales. In the wholesale industry, a typical asset turnover ratio might range from 2 to 4 times. So for Smart Auto that for every dollar of assets, the company generates $2.52 in sales revenue.
Inventory turnover is another financial ratio that measures how quickly Smart Auto sells and replaces its inventory. The ratio is calculated by dividing the cost of goods sold (COGS) by the average inventory during the same period.
For Smart Auto in a month, the company's inventory was sold and replaced 15 times. This is a strong figure and is moving up. The auto parts are in high demand.
The cash conversion cycle (CCC) is a financial metric that measures the time it takes for Smart Auto to convert its inventory into cash flows from sales. It evaluates the efficiency of your working capital management by analyzing the time it takes to generate cash from the sale of products. The cash conversion cycle is calculated by adding the number of days it takes for Smart Auto to sell its inventory to the number of days it takes to collect payment from customers (days sales outstanding) and then subtracting the number of days it takes to pay suppliers (days payable outstanding).
The cash conversion cycle is calculated by adding the number of days it takes for a company to sell its inventory (days sales of inventory, DSI) to the number of days it takes to collect payment from customers (days accounts receivable outstanding) and then subtracting the number of days it takes to pay suppliers (days accounts payable outstanding, DPO).
In this dashboard, using the automatic flow of data, this multi-faceted calculation is updated in the software in real time so every time a customer pays for parts (account receivables paid) – the ratio is updated in the dashboard. A shorter CCC indicates that a company can convert its inventory into cash more quickly. Smart Auto is doing a good job of dropping it’s cash conversion cycle from 73 to 53 days helping them to improve cash flow.
Trends CFO dashboard
The trends CFO dashboard is the classic dashboard that the CFO and all managers need at their fingertips.
There are three main widgets on this dashboard that are being fed directly from Smart Auto’s Profit and Loss (income statement) relating to sales, management EBITDA, total revenue, total COGs and total operating costs. These fundamental metrics calculated using real-time data help with everyone’s decision-making and depending on the areas in your business you want to track - you can choose to add your preferred key performance indicators.
The options for dashboards are endless but for holistic business performance in financial and operational dashboards you need them to be working with the actuals. This is where the power of the BI and FP&A platform works to pull this information from across your business into a single source and facilitates the automation of the updates of the dashboards.
The options for dashboards are endless but for holistic business performance in financial and operational dashboards you need them to be working with the actuals. This is where the power of the BI and FP&A platform works to pull this information from across your business into a single source, and automatically updates dashboards in real time, so that everyone from the CFO to the purchasing manager know that the information is correct and up-to-date.
Katrina is a professional writer with experience in business and tech. She explains how data can work for business people without all the tech jargon. She is always on the look out for new ways data is being used by business people to know more and be sustainable.
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