Every company beyond the corner candy store – remember those? – has complexities to their business that management must be aware of in order to manage. How to maintain that awareness? Lots of ways, including touring your facility with regularity, getting special analyses from all the important departments (which is hopefully all of them, otherwise why are they there?) and quizzing your management team at regular staff meetings. All good ways to get the information, if it’s reliably delivered and you can keep it all in your head. Want a better way?
The literature typically calls them KPIs, or Key Performance Indicators. Whatever you call them, they should be collected and reported in your dashboard, a 1-page essential addition to your monthly financial reporting package (if not needed even more frequently). Ideally in graph or chart form for easy absorption, here are 5 ideas for financial KPIs you might want to consider:
And now the kicker – your dashboard should chart each of these KPIs over time – for 6, 9, or 12 months, so you can see the trends developing before a leak turns into a gusher. Lots more details in Ch. 7 of my book if you want to read further.