Your startup is doing great this month!
Or is it?
Spreadsheet number 1 tells one story.
Spreadsheet number 2…
How about checking the bank statement directly?
Bouncing between spreadsheets and logging into multiple finance platforms – bank accounts, payroll providers, credit cards, accounting software – slows you down and adds confusion. What's more, you don't have your numbers organized well enough to track your startup’s performance over time let alone one month at a time. At this rate, identifying issues and strengths to plan for the future is near impossible.
But it doesn't need to be so tricky — there's a way to get the consistent financial information you need to understand your startup’s performance and strategize for growth. Automated accounting and financial dashboards can give you real-time actionable insights into your financial health.
Read on to learn more about how the best finance dashboards can help organize and measure your startup's finances and what to look for before setting one up.
What Is A Finance Dashboard?
A finance dashboard is a tool that visualizes your key performance indicators (KPIs), costs, and other important metrics to communicate your startup's financial performance. Rather than spending your time manually poring over various reports and financial statements, a dashboard lets you view all your financial data in one convenient place.
Different platforms will focus on and display different metrics, but the best let you customize to track specific financial KPIs. For example, you may want to view your burn rate, runway, and cash zero date based on your actual cash flow or accrual-based accounting.
The Advantages Of Finance Dashboards
The most important benefit of automated financial dashboards is that they give you actionable information to support your decision-making process using real-time data. Since these tools automatically collect data from your accounting process, you won't have to spend time consulting multiple sources to be confident that your numbers are accurate.
Another advantage is that you can quickly pull up the information you need in a single place. What's more, visual tools like charts, graphs, and tables help you quickly understand your financial performance. This reduces the time you’ll spend preparing for meetings and presentations since you'll have data-based insights at your fingertips
Without finance dashboards and automation, you're stuck dwelling on past performance and fixing errors when you should be planning for what’s next. Dashboards give you back the time you need for strategizing and planning.
Different Types Of Financial Dashboards
There are many types of financial dashboards you can choose from. Many are customizable to unify and display the financial information that's most important to you – like operating expenses, cash flow, or revenue – all in one place.
Other financial performance dashboards display views based on common metrics or objectives.
For instance, an accounts payable and receivable dashboard shows financial ratios that indicate what your business owes and is owed. A cash management dashboard provides visibility into your current cash situation and liquidity to determine when you can pay off your short-term debts.
How To Find The Best Financial Dashboard That Works For Your Team
Since there are so many products available, finding the one that is right for your startup's needs can seem overwhelming. Before deciding, consider the following:
- Data presentation style
- Format and readability
- Your team’s knowledge base
- The platform’s capabilities
- Available options and customization
Read on for more details on what to look for.
1. Centralized Data Upfront
Startup teams often find themselves logging into many different platforms to access the information they need. When your financial data is disconnected, there's more room for missed information, errors, and confusion.
A dashboard eliminates these issues by condensing your most critical financial metrics into one workspace. This lets you quickly view the information you need, ensures continuity, and helps you streamline your operations.
The most effective dashboards can merge all your reporting and key metrics into one place, making analyzing your most important numbers easier. You won't spend time flipping back and forth between different platforms, screens, and documents.
2. Wide Range Of Analytical Tools
As a startup leader, you’re expected to always know and understand your financials at the drop of a hat. By leveraging analytics, you can optimize cash flow and increase financial stability. The right KPI dashboard for your business should have a range of AI and machine learning tools that allow you to understand and analyze your data in real-time.
For example, you'll want a platform that automatically calculates your burn rate, runway, and cash zero date. This will give you clear insights into how you're using money and help you quickly identify any overspending.
3. Regular Financial Report Updates
To make sure you're up to speed on the status of your business, your financial dashboard should update your reports frequently. Choose one that synchronizes with the current state of your database every day. Instead of getting a report three weeks after your books are closed at the end of the month, you can generate one whenever you want.
So, when your board or an investor calls you for insights mid-month, you can present accurate information that's hot off the press. The best dashboards will even allow you to connect your board members directly so they can check in on your financials at their leisure.
4. Insights Delivered In Real Time
Viewing your startup's position using real-time financial indicators allows you to make on-the-go decisions and tackle problems before they get too big. Like the gas light indicator in your car, a financial dashboard will update you on any issues that need immediate attention.
5. Organized Financial Operations
A financial dashboard doesn't just allow you to streamline your basic bookkeeping data and use it as a single workspace for every element of your financial operations.
For example, a good dashboard will let you access your accounts payable and receivable, employee reimbursements, tax information, and track your budget in one place. So your entire organization has complete financial clarity and transparency.
Why The Quality Of Your Finance Dashboard Matters
When it comes to leveraging your financial operations for success, a dashboard presents all of your financial information in a way you and your team can understand.
Automating and analyzing your financial data helps you save time, reduce errors, and create solutions for your startup that keep it moving forward.
That's why finding a quality financial dashboard you can customize for your startup is important. With real-time financial reporting in place and a connected view of your finances, you’ll have a newfound decision-making power and a competitive advantage.