Creating a financial dashboard is key to measuring the fiscal performance of your childcare business. In this article, we provide a brief overview of your financial dashboard, including what it is and why you need one, and we offer several best practices to help you get started with a financial dashboard that works for your childcare business. Read on to find out more.
What Is a Financial Dashboard?
There is a saying in business that goes, “You can’t manage what you don’t measure,” and your financial dashboard will help you measure and manage the performance of your childcare business. A financial dashboard is a fiscal management tool that helps you visualize and analyze your business’s key performance indicators (KPIs) so you can accurately assess the financial well-being of your company and make well-informed business decisions. An optimal financial dashboard gives you an on-demand overview of how your company is doing, based on the metrics that are most important to you as a childcare business owner.
Why Do You Need a Financial Dashboard?
Every childcare business needs a financial dashboard. Here are several key benefits a financial dashboard will provide:
- A financial dashboard provides insight into key performance metrics for your childcare business.
- A financial dashboard helps you visualize your company’s key performance indicators (KPIs) with charts, graphs, or other visual aids that are easy to interpret.
- A financial dashboard gives you insight into important areas of your business to help you make informed decisions and maximize performance.
- A financial dashboard displays financial trends and helps you monitor your fiscal performance over time.
- A financial dashboard helps you figure out your company’s strengths and weaknesses, allowing you to invest your focus where it’s most needed.
Financial Dashboard Best Practices
A financial dashboard is a great asset to your childcare business. You will want to keep a few best practices in mind when launching a dashboard for your childcare company. Here are a few important considerations:
Decide Your Metrics
Determine which key performance indicators (KPIs) you want to measure on a regular basis. These metrics could be the cash in your bank account at the end of the month, employee turnover, student turnover, enrollment numbers, revenue, and so on. You will likely choose several KPIs that you want to monitor.
Once you choose your metrics, you will want to keep tabs on them on a monthly basis.
Keep in mind that some KPIs are static, meaning that you won’t expect them to change much over time, while others fluctuate. Comparing your metrics to past trends can be an important facet of your financial dashboard, so consider not only which metrics to display but the intervals and timeframes in which it might be helpful to display them.
Choose Display Options
Now that you’ve decided on the KPIs you want to measure, think about how you want them to be displayed on your financial dashboard. Would a graph or a chart be helpful? Would you like to combine metrics, or separate them out? Do you want to see present data compared to the past month, quarter, or year?
Financial dashboards offer a variety of ways to display your business’s financial metrics. Bear in mind that these visualizations can get complicated quickly, so it’s best to simplify. Try to avoid getting distracted by less important display options, like fancy graphs and font styles in favor of streamlined displays that show you what you really need to know.
Focus on Key Data
Too much of a good thing isn’t always a good thing. Remember to focus on the data that’s most important to you instead of getting lost in too many metrics. Your financial dashboard is a management tool designed to help you make better business decisions. If you feel too overwhelmed by the numbers to make an informed decision, ask yourself what you really want to know and focus on the data that reflects the metrics you care about. It really comes down to prioritizing your KPIs. Too much data is going to contribute to overwhelm. Instead, simplify your reports to focus on the essentials.
Use Financial Software or Work with a CPA
Many business owners will try to jump into a Microsoft Excel spreadsheet and try to create a financial dashboard from scratch. Using a spreadsheet to create your dashboard may prove timely and complicated, especially if you’re not sure how to go about it. Plus, if you decide you want to import data from other management tools, such as Google Analytics, you may run into problems.
We recommend using financial software designed to create a functional dashboard for your childcare business or working with a CPA who can lend their financial expertise to create the optimal dashboard for your business.
Now that you know what a financial dashboard is and why you need one for your childcare business, take the first step and get your financial dashboard started today. The experts at Honest Buck Accounting can help you implement a financial dashboard that helps you measure and manage your childcare business performance and maximize your revenue. Schedule a discovery call to learn more.