The importance of Dashboards in business: Why use Dashboard Reports?

In today's evolving business world, having information at your fingertips is critical for driving quick decision making to enable ongoing business success. In order to have this information so readily available we recommend utilising Dashboard Reporting.

If you are a decision maker in your business, you need to make sure decisions are backed up by real time data.

Dashboard Reports are a one-page snapshot of the live results of a business and how it is performing against key metrics you feel are imperative that your business is measured against. They provide decision makers with quick and easy-to-understand real time insights and analysis that assists in improving business decision making.

Why use Dashboard Reports?
Dashboard Reporting is a must have tool for managers and business owners. It collects all the key performance indicators (KPIs) and the company’s important metrics in one easy to view report. They help business owners and managers to review the bigger picture of business operations on a regular basis, while highlighting the key issues, risks and trends in the business.

Dashboards are vital for better decision making
Dashboards show how you can use data to your advantage. They can be dynamic and interactive, allowing you to use filters to view the data that best suits your needs. Dashboards gather data from multiple sources and systems and combine them into a single interface for a detailed overview of the business.

Planning
For Dashboard Reporting to be meaningful, it is important to understand what key information is relevant and should be included on the dashboard.  This requires planning. When planning your dashboards you should consider:  do you need more than one dashboard (should different business units have different dashboards), which key areas should be monitored, for example, do you need to measure your stock, etc.

What to include in a Dashboard Report will vary for each business, but there are some fundamentals that should be included:

• Financials
  Often you can link your Dashboard Reporting directly to your cloud accounting software such as Xero and this will display your real time financial results such as revenue and expenses. 
• Work in progress
  Customer orders received, orders in progress, completed and deliveries. This can include the amount of stock on hand and business efficiency such as stock turnover, debtor days, creditor days and inventory days. Other business planning and goals such as business performance against a strategy or business goals or projects that are currently underway in the business.
  
• Cashflow or "burn rate"
  A good Dashboard Report will show you how quickly you are burning your cash stockpiles and enable you to make the right decisions at the right time to help with liquidity.
  
• Key business drivers
  Business drivers are the key inputs and activities that drive the operational and financial results of a business. Common examples of business drivers are salespeople, website traffic, marketing leads, lead conversions, number and price of products and/or services sold, etc.
  
• Key business risks
  Identifying areas of weakness and vulnerability within your business and displaying it in an easy to understand format, will allow you to take control of the aspects of your business that are putting you at the biggest risk.

Businesses often utilise the expertise of their external Accountant to assist in the planning and designing of a Dashboard Report.

Data presentation
Once the business has identified what to include in a Dashboard Report, the next step is to design how the information is to be presented in the report.

When designing your dashboards keep in mind that dashboards should help the audience to understand the story within the data. Placing the data in an appealing visual context will help data to go unnoticed. To make sure your dashboard tells a compelling story, you should:

• Consider your audience
• Select the right type of dashboard (Strategic, Operational, Analytical or Tactical)
• Keep it simple and visually clear
• Use the right type of chart (Line chart, bar chart, pie chart, scatterplots or others)
• The key information should be displayed at the top of the screen
• Use colours to imply meaning of context (choose few colours and stay consistent, do not use too many different colours)
• Consistency in labelling and data formatting
• Try using interactive elements
• The importance of white space around the main elements (making the information easier to absorb)
• Optimization for multiple devices (desktop, mobile, etc.)

Data collection
A Dashboard Report is only useful and relevant if the key information is kept up-to-date. This can often be difficult to achieve depending on how much manual input is required. Finding ways to automate data collection  through a Dashboard Reporting tool can certainly help ensure that the information is updated regularly if not in real time.

Accuracy can be an issue if using spreadsheets to prepare dashboards. Manually re-entering data into a report can cause human data entry errors. If you do need to use information that is contained in spreadsheets, ensure that you are reviewing the formulas and other formatting on a regular basis and that spot checks are performed to avoid data entry errors.

Related: The challenges of Dashboard Reporting

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This article is intended to provide general information only, and is not to be regarded as legal or financial advice. The content is based on current facts, circumstances, and assumptions, and its accuracy may be affected by changes in laws, regulations, or market conditions.  Accordingly, neither Azure Group Pty Ltd nor any member or employee of Azure Group or associated entities, undertakes responsibility arising in any way whatsoever to any persons in respect of this alert or any error or omissions herein, arising through negligence or otherwise howsoever caused. Readers are advised to consult with qualified professionals for advice specific to their situation before taking any action.