Creating the Perfect KPI Dashboard for Your Business
Posted on 28th June 2017 in Advisory
Written by Freya Hughes
Running a business can feel like being lost at sea. Navigating your business past hazards can take its toll, so being able to rest assured knowing your finances are looking healthy is a lifesaver. Our aim is to get you docked to the safety of land, so you can take stock of where you are and prepare yourself for whatever might come next. Once you’ve read how to create the perfect KPI dashboard for your business, you can set sail once again and knowing your business is on the right path.
Let’s start from the beginning. Imagine the cloud as the sea, while software such as Xero and FUTRLI are small islands where you can safely dock your boat and seek guidance for your journey. Your business is your boat in this case, and you need to anchor on land to know where to head next.
FUTRLI island has no buildings on it, so you’ll have to get building: those are to be your dashboards. Within the buildings you build rooms, and those are your report cards. Let’s follow this journey to understand how to build your business a KPI dashboard, so you can set sail again on calmer waters.
In this blog, you’re going to learn the following…
How to create a dashboard
How to add four different types of card
Learn to build cards and formulas
An introduction to scenarios, including budgets, forecasting and what-if scenarios
We recommend you have FUTRLI open to really understand these processes.
We’ve broken it all down into seven steps, so we can cover everything. If you need more support, get in touch and find out about FUTRLI Advisory Certification.
1. Building your shelter: Creating dashboards and report cards
Starting nice and simply, to create a dashboard, navigate to the boards area and hit ‘New’. This is your blank canvas – just remember to name it something relative before you have multiple, as things might get a little confusing.
From here, you can select ‘Add card’, which is how your reports will be displayed. This will allow you to see data clearly, and you to work towards your business goals.
The Snapshot card: this is the best way to display up to five metrics. When you’re tracking your Key Performance Indicators, this is the best way to get the important information you need. The back of the card is the settings area, so choose from the drop-down menu and customise it. It’s simple and hugely insightful. From this you will get an idea of:
- Revenue for the current period up until today. We all want to know this!
- The forecast for revenue for the month up until today. This is important – we store your forecast/budget/scenario data just like your accounting data, daily. It’s going to say zero at the moment, but we’re going to fix that in a few minutes.
- How you are performing against your forecast target. Again don’t worry, this will have a progress bar soon.
- How you are performing today in comparison to last month for the same period. This is what we obsess over every day, from a revenue perspective.
- How you are performing today in comparison to last year for the same period. A key performance indicator for longer-term progress.
The Report card: a fairly simple card, this one needs to be monitored constantly to be effective. It gives you the results of tracking your Key Performance Indicators, which is one of the most important things you should be doing.
You’ll use this type of card for many of your insights. Report cards are very powerful and flexible, showing you: any account, category, account group, non-financial data, formula (KPIs), historical and future periods for actual and/or forecast data over bespoke periods.
Within the Report card, there are three kinds of data sets: actual (from Xero/QuickBooks), forecast only, and both forecast and actual. FUTRLI is the best solution for true advisory, as it shows the past, present and future in one place. You can duplicate any card onto any board (or duplicate a board for that matter!) and flip the data into looking forwards or backwards in a couple of clicks. This means there’s no need to create the KPIs or display options again.
At this point, you and your crew have found safe lodgings for your island stay.
2. Moving in: Display options
Now you’ve set up your board and some cards, let’s play with how you present the data. You can have a chart, table, or combination of the two. If you have multiple KPIs to monitor, with different data types (eg currency, percentage, margins), you can choose which type would suit which display option.
If you need to work row by row, hit the chart icon and select one. Whichever chart you choose will then be displayed on the row. Update all rows to display the same type of chart by selecting the tick box at the top. You have the option of displaying transactional or cumulative data. The pencil icon will allow you to edit the formula (KPI) you’ve created or selected.
You have settled in for your visit to FUTRLI island. Make sure your crew know what’s expected of them using your Key Performance Indicators – the shelter isn’t going to decorate itself…
3. Adjusting your surroundings: Controlling your formulas
Use the search bar to find any data within the system related to the organisation you’re working on. ‘See all’ will allow you to view all data related. As you select items, they’ll pop up in the formula bar. This should feel familiar, as building formulas is similar to in Excel. Handy functions include choosing whether a result going up is positive or negative (eg income vs cost of sale), copy any formula you make to your formula library for reuse within the search function in cards or within a nested formula later, choose to reference historic periods and transactional/cumulative data instead of the default.
Formulas work by referencing the name of the account. It will work across your client base if their AR account is called ‘accounts receivable’. If it is called ‘trade debtors’ for instance, you would need to delete the AR account from the formula and replace it with the trade debtors account.
4. Make your new home pretty: Card aesthetics
Flipping the card will reveal the table data is not completely visible. But don’t worry – cards are flexible and support visualisation of over 100 periods! You can resize cards if they’re proving tricky to read.
Your team have started to call their new digs home. What they don’t know if you’ve come across some treasure…
5. Finding a compass: Setting up your forecast
This is certainly the most exciting step, and might well be the quickest. Head to the scenarios section and hit ‘New’. From here, enter your settings and info, and match your accounts payable, receivable and your main bank account – and remember to press save! That should have taken you about ten seconds.
On your new scenario page, choose last year’s actuals and ‘Quick create’, then press ‘Build’. That should have taken five seconds. And you’ve got a two-year forecast based on last year’s actual P&L data!
You can now make another scenario with more realistic payment days, to illustrate a simple cash flow projection. Simply leave the scenario you’ve made with the ‘Back’ button, hit ‘New’ again and this time last year’s actuals and ‘Advanced create’. Name it, turn off every account category, and enter your figures. They’ll be separated into cost of sales and expenses. Now hit ‘Build’. This gives you a more realistic forecast.
You’ve found a compass – and the best part is, it was on your phone all along so it’s actually pretty high-tech GPS. This is going to help you navigate your way home. And it’s all in real-time.
6. Reading the map: Interpreting your results
Now you have a forecast, it’s going to be easy to monitor and track your Key Performance Indicators. All metrics will be on your chart. For example, you might have:
KPI 1. Revenue over the next 12 months. The best companies in the world have a hockey stick curve in the cumulative income line, something we are all gunning for!
KPI 2. Net income/profit. You must be aware of how much profit you’re likely to make, so you can make informed business decisions.
KPI 3. Net cash flow. This helps you identify KPIs that you can’t afford to fall below zero.
KPI 4. Bank accounts (cash flow). This is a great one to highlight areas of concern.
Even if you have some tricky months ahead, a forecast can help you build the plan to get your business out of the hole. Every business should be working like this: it’s not traditional, but now technology such as FUTRLI does the heavy lifting.
7. Perfecting your route: Comparison
Create a new card – this time you want a Comparison card. This is a useful tool to measure this year v last year, forecast v actual and scenario v scenario. Inputting your data via the settings, set up a line chart to distinguish the difference between your actuals and forecast.
And you’re done! What you’ve created is a dashboard which will allow you to track and monitor your Key Performance Indicators (KPIs), showing you your business’ performance at a glance. This data will show you how to avoid your business sinking in the choppy waters that is running a company. If you’re feeling adventurous, explore further cards and design your board in a way that makes sense to you or your client. Charts will always give you a great view of trends and your current or future position.
You’ve set sail knowing your cash is in safe hands. Having confidence in your figures will help you on your way to your next goal. Enjoy the journey to success.