4 Steps to Create a Financial Dashboard

Financial dashboards are an efficient way to integrate long term goals into your monthly management process. The most effective dashboards have simple easily understood metrics that clearly lead to achieving the long term financial goals of the organization. Financial ratios may not crank the corporate engine but clearly stated working capital and debt balances are a great way to communicate with management teams.

1. Work through a capital expenditure budget. It’s important to sell new ideas to the team and nothing is as powerful as a corporate wish list. New dumps pits, legs, and dryers need to be budgeted and prioritized.

2. The corporate budget comes next. Operating expenses typically remain constant. Grain margins and other income can fluctuate greatly from year to year, but they tend to be more predictable over a five to seven-year period. Revisiting these estimates regularly will allow a more accurate estimate of the new crop and stay in tune with changes to the marketplace. Once completed, give a reality check the capital expenditure budget.

3. Discuss corporate goals. Is the new employee budget sufficient to attract and train quality personnel? What are the long-term priorities growth or payoff of long term debt? Does the balance sheet have enough liquidity and access to capital to withstand a rally in the commodities market? Take another look at the budget and the capital expenditure budget.

4. Set corporate financial goals into the dashboard. Once again, work in the capital expenditure budget to sell the importance of the financial dashboard. Each member of the team should be able to clearly see how the numbers affect each goal. The most common goals typically integrate growth with the payoff of long term debt. Tracking working capital, term debt balances, net income (or a form of EBITDA), and equity are the most popular metrics used.

Incorporate the financial dashboard with your monthly or quarterly reporting and the entire team will clearly see the company’s successes whether it’s in the form of a new bin or a stronger balance sheet.