If you are part of a finance department, you know there is always something to do
Whether looking over the latest balance sheets or checking in on your stock prices, there’s always something new to monitor and document. It can be easy for the finance department employees to feel overwhelmed by all of their tasks when they don’t have a clear view of what needs to get done.
With the use of the dashboard, companies see a 6% increase in revenue within the first few months! Once they try it out, they also have a high adoption rate over 85%. Once in place, an average of 20 days are saved per year. That’s one reason why creating an effective dashboard for your finance department is so important! On this page, we will break down what you should have on your finance department dashboard.
A company’s assets can be defined as the money, goods, or property owned by a business. It could be cash on hand, investments like stocks and bonds, machinery, inventory, and so on.
Assets can also include intangible assets such as intellectual property: patents, trademarks, and copyrights. These types of assets don’t have any physical form, but they do still provide value. In any case, these are all great things to track in your dashboard.
You should always know how much capital your company has in their accounts, ready to be used at any given time. This number is vital in case of emergencies and can be used to figure out how much additional capital you might need.
Knowing these items’ current value or worth will help you keep track of new developments and real-time decision opportunities, as these values change over time. It also informs your decision-making process when it comes to investing in future funds or projects.
Property is another asset that you should track. This can include office buildings, industrial facilities, and even vehicles like cars or trucks. Of course, this information is crucial for companies who own their buildings instead of renting.
If your company sells goods, then they will need inventory to sell them with! Never again will you forget about small inventory items with a dashboard! Tracking the value of these assets ensures that you know how much you can sell and for what profit.
The value of intangible assets will vary but are worth tracking nonetheless. Intellectual property like patents, trademarks, or copyrights will need to be tracked so that they don’t go unpaid.
Perhaps the most essential component in your dashboard is the net income. This is the income earned by a company after all expenses have been subtracted from revenue. Understanding how much money your business makes can help inform decisions about expanding or cutting back, investing in other opportunities, and much more! Of course, you will also need to track all your expenses data to track net income.
Gross profit margin is the amount of profit the company is making based on how much it sold. When you have access to this information, you can better determine how well the company is doing at any given time. In addition to gross margins, other types of profit margins might need to be tracked.
This is the amount of profit that a company made on its ongoing operations.
Net profit margin is calculated by dividing a company’s net income by revenue.
Shareholder equity measures the value that a company has between its assets and liabilities on paper. You want to make sure you have an accurate representation because it will allow you to compare with other companies in your industry for benchmarking purposes.
Other company executives might also like to hear about shareholder equity when they are considering investing in your company. Therefore, your job as a finance team should be to secure all of this information in an easy-to-read manner that can be easily shared and accessed when necessary!
Knowing your current debt ratio is essential as a finance department team since it will tell you how much of the company’s assets are being used for debt payments. When you have access to this information in real-time, you can reduce or increase debt without feeling that you are recklessly spending.
In addition to the current debt ratio, you should have specifics on the current loans you have taken out. You should have information such as exact balances, how many payments are left, what the monthly payments will be, and how they all align with your department’s budget.
The finance team is the glue that holds your whole company together and keeps it healthy! As you continue to grow, you will inevitably have lots of new projects to tackle. Of course, they will also come along with a budget. Keep project status and budgets handy on your finance department dashboard. This will help you better understand what your resources are and how much they can handle at any given time.
An ROI is an important metric to keep track of for your company’s finance department dashboard. It calculates profit relative to cost or investment, and it lets you know how well your investments are doing overtime. It can be challenging for some companies who invest in their own product line to find an accurate ROI regularly because they don’t have access to this information as often as other companies.
To measure your current ROIs accurately, you will also need access to how much was invested and whether or not the investment was successful. Typically, you might not quite have an ROI when tracking current investments.
You should also have access to an accurate representation of how your past investments are doing. You can compare and see any correlation between those numbers and what has been getting spent in terms of current investments. This will allow you to take steps rationally using previous experiences.
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