Introduction to the CFO dashboard and KPIs in the age of digital financial data.

What is a CFO dashboard

A CFO dashboard is a type of financial dashboard that provides an easy way to compare and analyze business financial data. A CFO (Chief Financial Officer) or Finance Director would analyze the data and develop solutions to prevent and solve potential issues.

CFO dashboards are a digital display tool that holds all the financial information in one place and keeps everything visible. This includes company cash flow, revenue, costs, etc. Advanced software and CFO dashboard templates offer personalized insights and analysis. Some examples can include an excel dashboard template or create your dashboards, like one constructed from a website such as Monday.com.

Whenever you make decisions, you can identify potential cash flow issues, monitor business health, and check for updated facts and dashboard data. It is not easy to check the ongoing and outgoing account balances and deliver reports on the related analytical efforts. 

Significance of a CFOs Dashboard

Chief Financial Officers or Finance Directors use a CFO dashboard to maintain financial health, overall performance, and a high-level company overview. It supports them as they conserve operational oversight and plan for future eventualities. 

Next, we'll explore the dynamics of reports for the CFO, some examples of CFO dashboards, CFO dashboard tools, and some CFO dashboard Key Performance Indicators (KPIs).

CFO report 

CFO reports furnish a blend of history, prophetic, and real-time perceptivity. Reports provide visual KPIs to help financial officers make informed decisions based on various core financial activities. 

With the CFO report template, you can magnify information that will help you streamline your popular conditioning, enhance your strategies, help you standardize your pretensions, and ameliorate the way you communicate essential perceptivity with your stakeholders. Let's see an example. 

Exploring CFO Dashboard Report examples 

It's time to look at real-world CFO dashboard examples and know what to include in your reports and why you need them for increased financial success. 

CFO KPI dashboard

The CFO KPI dashboard is an essential reporting and analytics tool for any financial decision-maker. Using a dashboard template to go about your business can be useful in many instances. Interactive dashboards can be helpful for communication and presentation purposes. More dashboard examples can be found on websites and applications previously mentioned, such as Excel and sites like Monday.com.

This powerful CFO KPI dashboard offers key metrics on data such as Quick Ratio / Acid Test, Cash Conversion Cycle, Vendor Payment Error Rate, Budget Variance, and Working Capital. 

Investor Relations CFO Dashboard

Maintaining investor relationships is a top priority of a financial manager. Part of their responsibility includes the CFO report, as it was developed to make a return on assets and much more.

CFO KPI Dashboard

As a reminder, a CFO Key Performance Indicator (KPI) is a quantifiable high-level measure of financial performance data. These KPIs are used to help a CFO make informed decisions that steer their company in the right direction and are also used to measure a company's financial performance relative to competitors in the same business. 

Following are some important KPIs and Metrics for the CFO Dashboard. 

  • Quick Ratio 
  • Current Ratio 
  • Gross Profit Margin 
  • Operating expense ratio 
  • Working Capital 
  • Operating Cash Flow 
  • Return on Equity (ROE) 
  • Net Profit Margin KPI 
  • Finance Error Report KPI 

The following are CFO-KPI examples you can expect to see on a CFO dashboard. 

A deeper look into CFO dashboard KPIs

Quick ratio 

One of the most commonly used CFO KPIs is the quick ratio. It allows you to quickly assess the financial health of your company and measure a company's ability to fulfill its financial obligations. It compares specifically the ratio of your revenue gains and losses. The ideal ratio would be 1.0. 

If the business is higher than that, you are in the green. The greater the number is than one, the better your business is.

Gross profit margin percentage 

Gross profit margin is one of the critical CFO KPIs expressed in percentages. The gross profit margin KPI will tell you how much of the total sales revenue you keep after accounting for all direct costs associated with the production process. It specifically measures how much profit you make before expenses. A good profit margin ratio for a business would typically be around 50-70%.

Current Ratio 

This CFO metric is generally used to measure your organization's capability and pay all financial obligations within a year. It focuses on liquidity and the company's liabilities. 

How to Calculate Current Ratio 

Divide the company's current assets by its current debts.

Operating expense 

The operating expense ratio is a commonly used metric that will inform you whether your company is scalable or not. It can be used to determine if you can increase sales without increasing operating expenses. 

Working Capital

Immediately available cash is known as working capital; it creates a picture of your business's financial health by evaluating available assets. If you choose a sample KPI for your finance team, this one would be easy to calculate using the business's data. 

Operating Cash Flow KPI 

Another pivotal way to cover the fiscal health of your business is the operating Cash Flow KPI. The operating cash inflow to total capital employed rate analysis allows you to dive deeper into the fiscal health of your business's data. 

Return on Equity KPI 

Return on Equity (ROE) is a financial KPI used to measure your organization's net income against each unit of shareholder equity or net worth. 

Net Profit Margin KPI 

This financial KPI is an excellent snapshot of the profitability of your business, used to calculate your business effectiveness data at generating profit on each dollar of revenue already built.

Finance Error Report KPI 

The Finance Error Report calls out finance reports that bear explanations or contain egregious crimes. It helps to create confidence in the validity of your company's reporting. 

The CFO dashboard is a visual donation of critical financial data and data processing, and it helps you better understand your company's financial performance. The dashboard is used to look at crucial criteria and make informed opinions about the decision in which your business is heading. 

KPIs should be an important asset in matters that CFOs undertake on a regular basis. CFOs and other senior executives have to deal with a couple of day-to-day tasks. This includes making financial decisions and reporting those financial decisions—KPIs aid CFOs with tasks like these. 

Some Background into Key Performance Indicators

Key Performance Indicators or KPIs are key indicators of progress toward a business's ultimate result. KPIs focus on strategic and operational improvements in a business and create a numerical basis to help focus on what matters most, using real-time actual data. 

KPIs can be financial KPIs (that can include the net profit or gross profit margin), revenue (minus certain expenses), or current ratio (liquidity and cash availability).

How to Calculate Financial KPI

Financial KPIs are found by dividing net income by total assets.

How to Measure Good KPI

To measure Good KPI, you will have to:

  • Track efficiency, timeliness, compliance, economics, and performance data.
  • Make sure you are balanced between lagging and leading indicators. 
  • Lagging indicators measure existing trends after some time after the economy has turned into a downward trend. 
  • Leading Indicators or inputs are what define actions that are necessary to achieve goals as a whole. 
  • Analyze and combine data and offer comparisons that help the overall degree of performance over time. 
  • Ensure you provide objectivity on your progress towards achieving the desired result.

KPI and Your Employees

Your business's human resources department can be a great way to evaluate the company's overall financial metrics. These metrics are used to see how HR is contributing compared to the rest of the organization.

The payroll headcount ratio is a metric that you can use to calculate to see how well your company is utilizing its workforce. This metric shows how many employees are engaged in the payroll process when comparing it to the total number of employees. They use these metrics to make financial decisions on labor costs. These analytical efforts on the HR rep's side should be essential in your business.

Decreasing ratio is also the result of wanting to reduce the attrition rate of employees. You can use this to decrease resolution time and increase satisfaction.

How to Calculate Payroll Headcount Ratio

Divide HR full-time positions by the total number of employees. Here you can include part-time employees, full-time employees, contractors, and freelancers. 

Managing the Shareholders

A Shareholders equity is the amount that owners have invested in their business. This can include the money they've directly invested and the accumulation of income of the company overall.

How to calculate Shareholder Equity

Subtract the total liabilities from the total assets.

Net Promoter Score

Figuring out where your company's expenses lie is only half the battle. Net Promoter Scores evaluate how customers view your company and if your reputation is solid. In other words, customer satisfaction is key to ranking your business.

How to Calculate Your Net Promoter Score

Subtract the percentage of Detractors from the Percentage of Promoters.

Accounts Payable in Relation to Your KPI

You should be tracking Accounts Payable (AP) to provide ways to measure the productivity and efficiency of the people who manage the KPI. Making sure cash flow is secure, as well as supplier satisfaction, is key to your business.

Payable turnover is similar in the sense of measuring short-term financial obligations in liquidity in relation to the rate at which you pay off the suppliers. A good place for your company to be in payable turnover is a ratio of at least 4.

Average Accounts Receivable and Financial Modelling

This is a metric to calculate the sum of starting and ending receivables over a set period. In your business's financial modeling, these accounts turnover ratios can be used to make balance sheet forecasts.

Average Accounts Receivable data differs from Average Accounts Payable data in how it is recorded, who is in charge, and how it is recognized in the financial reporting. Accounts Receivable is recorded as a current asset on the vendor's record and recognized as income unless written off. Accounts Payable is recorded as a current liability on the client's record and recognized as a liability until paid.

Key Takeaways

Your business can prosper so much by focusing on its internal aspects. KPIs should be evaluated regularly, and by using multiple sources, you can measure other significant factors such as net promoter score, which are essential to customer satisfaction in your business.

If hiring a Chief Financial Officer is not a financially viable option. However, if you still want someone to analyze your CFO dashboards and improve your company's financial health, you can consider hiring a virtual CFO.

Suppose you want to embrace the power of machine learning and regain control of your company's finances. In that case, gini is a financial planning platform for founders and small business owners to help them better cost-effectively control their finances.

Get access to real-time financial analytics and one-to-one free consultation on your company's finance and funding with gini. Using gini, you'll eliminate wasteful spending, extend your runway, show your stakeholders you are in control, and raise money faster. Click here to start your 14-day free trial.

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