Financial dashboard: Are you measuring the right metrics?
Your financial dashboard should report on your trade business’s performance, giving you a snapshot of critical information. The question is, is your dashboard providing you with an accurate financial picture? It comes down to this: right data in, right data out.
In this article, you’ll see why financial dashboards have gone from after-thought to front-of-mind for business owners who want to know if they’re making a profit. A financial dashboard is a management tool that helps to track all your relevant finance key performance indicators (KPIs).
We’ll outline some key metrics you should be measuring. For a more in-depth look at financial dashboards and making profit in your trade business, REGISTER NOW or our in-studio Lifestyle Tradie Live virtual event on Thursday, 19 November, starting at 8:00am AEDT.
What metrics should you track?
As the trade business owner, it’s up to you to track the metrics that matter to you and your defined goals and objectives. A KPI dashboard provides you with an at-a-glance view of your business’s performance in real-time for a better picture on how the entire organisation is doing.
In our trade business, we track metrics in the following areas:
For example, numbers of leads, number of quotes per week/month, average-dollar sale per tradesman, profitability per product/service, growth rate in total sales, and expenses of percentage of sales.
For example, total outstanding debt, average time taken by customers to pay their debt, cash ratio, financial reports, such as Profit & Loss, balance sheets, and forward forecast.
For example, net earnings per tradesman, billable hours as a percentage of paid time, production rates as a percentage of paid time, benchmarking; direct comparisons of business with other similar business operations, and time to process orders and enquiries.
For example, turnover and absenteeism, decrease or increase in number of employees, and customer feedback.
Why are KPIs important?
If your business’s goal is to reach your break-even point and get into the profit zone, you’ll use KPIs to measure your team’s performance to understand whether they’re on track or veering off route.
KPIs are important for accountability purposes, providing you, as the trade business owner, with information you can draw on to analyse, review and progress towards your goals, including profitability.
Getting employee buy-in is the ‘key’ to KPIs — and critical to creating a high-performance team.
So, what does your financial dashboard say about your trade business? For a deeper dive on your financial dashboard, including a sneak peek into OUR financial dashboard, secure your FREE spot at Lifestyle Tradie Live: https://www.lifestyletradie.com.au/events/