How to Implement Accounting Dashboard?
An Accounting Dashboard (AD) is a powerful digital tool that enables businesses to gain valuable insights through financial data analysis. By tracking key performance indicators (KPIs), reducing real-time data to essential insights, and providing customizable reports, Accounting Dashboards can help accounting and finance professionals save time and make informed decisions. Here are five steps that businesses can follow to achieve accounting intelligence through an Accounting Dashboard:
Step 1 – Accounting Dashboard as Management ToolTo ensure the successful development and implementation of financial management tools, the Finance team should first create a comprehensive Project Strategy. This strategic project should be discussed extensively among the members of the finance department, with the goal of finding a solution that benefits all areas of accounting. Once the finance department has finalized the strategy, it must be approved by the leadership to ensure its proper execution. Only after the strategic objectives are laid down should the finance professionals in the team proceed with developing various metrics and KPIs for monitoring the tool’s performance.
Step 2 – Establish the Right MetricsTo optimize progress toward established goals, it is essential to select the appropriate number and type of metrics to track. These metrics can range from more technical measures such as accounts receivable and accounts payable outstanding, aging, ratios, and profit margins, to softer indicators like location-specific expenses, budget overruns, and daily sales data. It is crucial to select metrics that align with the desired outcomes and to avoid becoming bogged down with too many metrics initially. Too much information can overload the dashboard and reduce its overall effectiveness, as well as complicate system development efforts. Therefore, selecting the right metrics is vital to ensure that the accounting team stays on track toward the smooth execution of operational activities and leads to improvements in the gross margin of the business.
Step 3 – Team AcceptanceTo successfully implement an effective AD system, it is crucial for managers to change their perspectives on their roles. Existing reporting and decision-making practices will need to be re-evaluated, and it is important for all users involved in the process to fully support the new approach to ensure the system’s success. A key element to achieve user buy-in is to provide thorough training on the concept of the finance dashboards and involve users in the review of metrics and user interface and reporting formats. This will help users understand the benefits of the AD system and how it can improve their work. In addition, including users in the feedback loop can help ensure that the system is designed to meet their specific needs. Overall, a successful AD system requires a shift in managerial mindset, thorough training, a skilled finance team and user involvement in the design and review process.
Step 4 – Flexible Accounting Dashboard ToolAn Accounting Dashboard tool is one of the finance management tools that should be easy to implement by selecting off-the-shelf technologies for standard business dashboards that provide users with the flexibility to customize their financial dashboards. Since the Flexible Accounting Dashboard Tool allows for efficient financial data analysis, it enables businesses to make informed decisions based on real-time insights. Finance dashboards are the best among the project management tools which allow for the integration of data from various sources to provide meaningful insights and analysis. Finance dashboards should not require an intense IT project.
Step 5 – Be Prepared for SurprisesAccounting dashboards can reveal hidden insights and challenge long-held assumptions about business performance. As managers review the data presented, it is an opportune time to critically examine past assumptions and validate the accuracy and consistency of the underlying data. However, it is crucial for the finance department to keep in mind that relying on inaccurate or inconsistent data can create significant obstacles in decision-making processes.
ConclusionImplementing an accounting dashboard requires a thorough understanding of financial data analysis in order to effectively track and visualize key metrics such as revenue, expenses, and cash flow. By implementing the methodology outlined above, the finance team can create a comprehensive roadmap for the implementation of finance management tools like the Accounting Dashboards within the organization. This will allow for the integration of daily operational activities with strategic objectives, resulting in effectiveness and a streamlined approach to achieving business goals along with an increase in gross margin.
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