5 Mistakes To Avoid When Creating Your Trade Business Financial Dashboard
Monitoring your finances, whether you are a sole trader/’1 man show’ or a company with multiple staff is EXTREMELY IMPORTANT!
It can be a time-consuming and difficult task to monitor all of the financial aspects of your business.
Fortunately, there’s an easy way. Through a financial dashboard.
Incase you missed it… we’ve written a blog all about financial dashboards and their benefits, you can CLICK HERE to check it out.
Otherwise, here’s a quick summary… Financial dashboards list all of the important financial data from your business so that you can quickly and easily glance at its status and understand in an instance, your numbers.
When creating your financial dashboard, you can technically input any type of data that you find useful; however, this isn’t always the strategic ‘route’.
To be strategic… take note of these common mistakes to avoid when making your own financial dashboard.
1. Creating A Complex Dashboard
You want your dashboard to be as simple as possible so that you can glance at it and instantly understand your business’s financial situation.
Loading your financial dashboard with too many or too complicated metrics, graphs, charts, and other data can make it difficult to analyse. It could even result in irrelevant information and just cause you confusion!
A dashboard that is easy-to-read will make it easier for you to interpret the data faster and avoid confusion, compared to a dashboard that is full of far too many visuals and data.
2. Using Irrelevant KPIs (Key Performance Indicators)
When creating your dashboard, you will include KPI’s, so that you can easily compare your results to your goals.
While you can freely choose whatever KPI’s you want to use for your dashboard, you must first think “is it appropriate?”.
For example, you use a financial dashboard to monitor your financials on a weekly basis, your KPI’s firstly need to be on a weekly basis, and you’ll also want to avoid adding long-term financial figures such as current ratio analysis.
3. Not Asking For Advice
We understand that sometimes you might want your financial data to be private… but you should consider consulting professionals when creating your dashboard.
Hold a meeting with your accountant or bookkeeper and discuss how to make a financial dashboard that is suited to your various financial goals, and which figures and KPI’s you should include.
4. Not Utilising The Dashboard
This is probably the most common of the 5 mistakes trade business owners make… they create a financial dashboard and only view it every now and then or even only once a year.
Your financial dashboard should be frequently viewed (and even updated if necessary!) in order to monitor your financial performance. Also, the earlier you detect any financial mishaps on your dashboard, the earlier you will be able to correct it.
5. Visual Presentations Are Messy Or Irrelevant
Proper use and placement of visual components will not only make your dashboard pleasing to the eyes but also easy to read!
If you do include a visual component… Use the most suitable one for the data you’re presenting. For example, use line graphs to showcase data over time rather than pie charts or bar graphs.
Or, if you present your data through a table, make it as simple as possible, only adding colour and formatting where it’s needed to make it more comprehensible.
Interested in learning more about creating your financial dashboard the RIGHT way? Come check out our LAST round of ‘Next Level Tradie’ events for 2018 in Brisbane, Melbourne, and Sydney! On the day, we will be going through our EXACT financial dashboard we use in our own trade business and how we set it up! CLICK HERE to grab your free ticket!