There are two levels of reporting in the world of accounting and bookkeeping. The first level is the financial statements themselves. These are detailed reports consisting of rows and columns of numbers like balance sheet and income statements. Often these reports are difficult for the average layperson to understand, interpret, and use in everyday business management.
The second level of reporting is what’s known as Scorecards and Dashboards. These graphical reports represent what are called “Key Performance Indicators” (“KPIs”). These reports are used by owners and management to track key metrics on a regular basis. When a key metric suddenly changes, these reports reflect those changes so that management can react quickly and decisively to make course corrections. Without the availability of these reports, serious business problems can remain undetected for long periods of time and often well after it’s too late.
In a perfect world, the Scorecards and Dashboards would be part of the core financial software. Unfortunately, Quickbooks does not have much to offer in this area. However, there are plenty of Excel based scorecards and Dashboards available as well as a new web based product that looks promising.
The three key factors in using scorecards and dashboards to your advantage are the quality of your bookkeeping and accounting, developing the right scorecard metrics, and using the scorecards regularly and consistently with the right managers and employees in the business. Depending on the nature of your business, weekly reporting would be ideal and we would not recommend going longer than a month between report review meetings.
Starting with great bookkeeping and accounting practices, SmartBooks Corp builds the foundations necessary to develop the Scorecards and dashboards; These reports are crucial to our clients and lay the framework for great strategic planning, monitoring, and execution.
Here is an example of a dashboard report:
Copyright 2012 SmartBooks Corp. All Rights Reserved.