Financial reporting using dashboards is crucial because it allows companies, from medium-sized companies to multinationals, to rely on key indicators to manage their activity. However, a financial business intelligence dashboard cannot be haphazardly put together. There are rules to follow and best practices to get the most out of it.

Below, BI experts from InetSoft share five golden rules for a good financial BI dashboard.

Understand the user before building the financial dashboard

To script the data – an essential step in bringing your financial dashboard to life – you need to know the context of use and the needs of the dashboard user. Focusing on the user makes it possible to identify the most important indicators. For example, a financial dashboard for a company CFO must integrate data from relevant financial departments (auditing, financial planning, budgeting, accounting departments, etc.) and feature key indicators such as Gross Profit Margin, Return On Sales Margin, OCF, Leverage, Quick Ratio, Current Ratio, Working Capital and more, to provide the CFO with a clear overview of the company’s financial performance.

A financial dashboard does not have to be exhaustive

The risk of drowning in the data is one of the first pitfalls encountered when developing a financial dashboard. The first way around this is to focus on the information available at the right time. The second is to prioritize financial KPIs, by importance. For example, a financial dashboard for sales and marketing will focus on KPIs such as Customer Acquisition Cost, Marketing ROI, and Customer Retention Rates, indicators that are different from a cash flow analysis dashboard that will feature KPIs such as Cash Inflows/Outflows, Cash Balance, Average Days Delinquent and Current Accounts Payable. Keep in mind that although you don’t want to leave out important information, nobody wants to follow the activity of extraneous indicators.

Choose KPIs that tell a story

Before building a financial dashboard, you should ask yourself what your main goal is. Is it to support the management of a marketing project, to analyze the company's financial performance, or simply to look at financial indicators for a specific period? The goal should not be simply to show results but to offer an overview of business activity. Each KPI must tell a story about the company's activity. In addition, each visualization must have a clear and precise message to facilitate the understanding of the overall data.

A financial dashboard is an evolving tool

It is crucial to update your financial dashboard periodically to maintain its relevance and effectiveness. This will allow the company's executives, CFOs, and accounting teams to adjust the decision-making cycles to the dashboard and make it a real tool for managing the company's performance. To get more information about financial dashboards, interactive SharePoint dashboards, embeddable dashboards, and more, please visit InetSoft today.