How to Implement Accounting Dashboard?
An Accounting Dashboard (AD) is a powerful digital tool for business intelligence on accounting data. The best Accounting Dashboards let accounting and finance professionals save time by tracking key KPIs, reducing massive, real-time data down to vital insights at a glance, and customizing reports for an instant, robust financial understanding. With the right Accounting Dashboards in place, the Finance Manager can see revenue, costs, profit, loss, and many other guiding stars laid out at the fingertips that will help to make accurate decisions for times ahead as well as to change course promptly, if need be.
The right dashboards will give the team the power to spot trends, opportunities, and growing problems and effortlessly visualize large datasets. With easy-to-parse graphical representations, the team can deliver crisp, concise C-suite presentations, and quickly analyze business performance, operational statistics, and key metrics with minimal effort.
These 5 steps must be followed to achieve accounting intelligence through the accounting dashboard:
Step 1 – Accounting Dashboard as Management Tool
The Finance team must develop a Project Strategy of this tool before developing various Metrics and KPIs for the team to monitor. The strategy must be discussed broadly by the finance team as a win-for-all solution on any specific accounting area or more and approved by the leadership to ensure proper development and implementation.
Step 2 – Establish Right Metrics
Once the strategy has been set, the next step is to identify the right number and type of metrics to track the accounting number progress toward its established goals. Metrics can range from harder, more technical goals such as AR/AP outstanding, Ageing, Ratios, Profit margin levels to softer, less technical ones such as Expense by location, budget over-run, daily sales indicators and so on. It is critical to measure the right factors for stated objectives and be careful not to get wrapped up with too many factors initially. Information overload can actually reduce overall dashboard effectiveness and also further complicate system development efforts.
Step 3 – Team Acceptance
Implementing an effective AD system will require a significant change in the way managers view their jobs. A new AD system will result in existing reporting and decision-making practices and hence, all involved users should be fully on board with the new approach in order to make the system successful. The effective way to buy in from users is to provide them with the needed training on the Dashboard concept and involve them in reviewing the metrics and providing feedback on user interface and reporting formats.
Step 4 – Flexible Accounting Dashboard Tool
An Accounting Dashboard tool should not become an intense IT project! The team should select off-the-shelf technologies to build standard business dashboards in a rather quick manner and should allow the users a great deal of flexibility, such as changing their dashboard formats based on their individual habits and tastes. The right toolset should also allow for the integration of corporate data from a variety of sources, ranging from databases to spreadsheets for bringing it together for meaningful analysis and insight into the numbers.
Step 5 – Be Prepared for Surprises
Many Accounting Dashboards may result in new discoveries about existing data and assumptions that have been, in place, without much notice for a long time. This is a good time for Managers to take a critical look at data and validate past assumptions. Remembering, that a dashboard based on inaccurate or inconsistent data will result in many decision-making challenges.
By adopting the above methodology to address the business needs, the team can devise an effective roadmap to implement Accounting Dashboards in an organization and tightly link daily operational activities with strategic goals.
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