A Simple Step-by-Step Guide to Set Up Your First Financial Dashboard

July 26th, 2017

KPI and dashboards had been the latest craze in the business world and the flood of resources (and noise) had made it hard to know where to even begin. So here is a step by step breakdown to set up your business dashboard.

Before you even get into which tools to use, you need to ask yourself  what are the goals that you want to achieve and what  are the things that are keeping you up at night? Once you have these priorities clearly identified, it’ll make the tools selection along with the dashboard building a lot easier.

Like most things in life, to get to where you want you must first know where you stand. Say you’ve identified “increasing profitability” as your top priority for the rest of the year, the first thing to do is to know exactly how profitable you are today. You’ll be surprised how many entrepreneurs are unable to tell me their net profit let alone their gross margin for a given time period. If you can’t answer that question now, step one will be to get there. Your net profit, gross margin, and revenue will make up the core of your financial dashboard; aim to have these available and up-to-date on a weekly basis. Once you are able to do that consistently, you’ll be ready for level two stuff.

By following these steps and keeping things simple to start, the dashboard you build will gain traction simply because it is up-to-date and focused. Remember, a complicated dashboard that’s not up-to-date is just an expensive piece of tech collecting dusts. A good dashboard will only show the metrics that truly matters and drive behavior changes that lead to results .

Once you have a clear understanding of your goals and how to get the metrics you want on a consistent basis, you can choose the tools that can help display this in one cohesive form. While we’ve used over 10+ dashboard tools at DeepSky, we’ve ended up with two of our favorites that we thought were a good balance between capabilities and ease of use. They are Grow.com and Microsoft’s Power BI.

While we enjoyed the advanced capabilities of Power BI, we were bummed that it doesn’t integrate directly with some of our favorite accounting tools like Xero. Grow.com, on the other end, integrates with Xero and Teamwork Project Management but currently falls behind with its customization capabilities. Don’t despair though, technology and tools will advance as time goes on and a good dashboard is defined only by one that informs and drives action. Too many entrepreneurs get caught up with the dilemma of choosing the “right tool” and loses sight that all you have to do is act. Till this day, one of the dashboard in our office that yields the biggest bottom line impact is still just a Google Spreadsheet.

So set forth and get your first dashboard up and running! I’d love to see what they look like, the items you are tracking, and hear about the progress you guys are making with it.

Share on here (or share privately) about which of your dashboard saw the best result in your business.


How to Pick the Right Accounting Software for Firms

June 10th, 2014

Your firm has been growing rapidly over the past few years. You’ve gotten better clients, hired on more people, and the existing platforms you’ve hacked together over the past few years just isn’t enough anymore.

You need one place where all of your financial data resides; but with the plethora of options out there, how would you know which software to go with?

1. Understand your needs and wants

You don’t need an accountant to tell you what is it that you are looking for. Just think from your perspective on the what and the why. Take a hour or two to sit down and write down (yes, on a piece of paper) all the things that are working well and all the things that you are struggling with. Ask whoever you have involved in your process to do the same (their frustration can be very different from yours.) Then go through the list and explore how each item is impacting you and how it’d affect your business if it were improved.  Pick the top 5 things that you’d “need” to have as a result of this effort. Don’t worry about the “how” to get these things just yet.

2. Identify restrictions

Are there things that are non-negotiables in your business that need to be considered? Most firms that are privately owned don’t run into too many restrictions – but it’s still important to point some out. For example, do you have multiple offices located across the world? Foreign currency or having multiple related entities are usually the first things that test the limitation of any accounting software. Do you travel a lot and would like to have access to your financials from anywhere in the world? A cloud-based solution may be your best bet in this case. The point is, identify all the non-negotiables for your firm so it’s easier to eliminate the softwares that don’t fit the bill.

3. Understand that software is just one piece of the puzzle

There are no silver-bullet accounting software out there that will solve all of your accounting needs. Think of it as a finely tuned Ferrari or the latest version of Photoshop – it is only as good as the person who operates it. Choosing an accounting software is a big move, so consult with your advisors on identifying the “how” to your needs and wants. This means defining business processes that will allow us to utilize the capabilities of the software we end up picking, work-arounds that we need to implement to augment the shortcomings of the software (yes, none of them are perfect,) and a set of clear instructions for the executors to follow in an on-going basis.

The rest gets easier. Once you’ve identify the needs/wants, restrictions/non-negotiables, and the how – it’s a matter of researching the market place for a software that fits the requirements you’ve set. Remember, the technology need to follow your strategy / process. Not the other way around.

Few more tips:

  1. Don’t get sucked into brochureware and understand the actual software will always be slightly less exciting than their video. That’s where a good team and process come into play.
  2. It is okay to leverage the strength of best of breed softwares that only perform a certain function (ie. invoicing, bill pay, expenses, etc.,) just don’t try to turn it into a full-fledge accounting software. It won’t work.
  3. Integration between softwares always come with a caveat. Just because it “integrates” doesn’t mean it “integrates” to your level of expectation. Inspect what you expect.
  4. Migration means some form of data loss. You have to decide how much historical data you really want/need and to what level of detail. Sometimes, the cost to fix is greater than the value it will create.
  5. Lastly, there is no “best” in accounting software, everything is relative to your unique company and needs. To help with this, we will be doing a Tuesday Tech Showdown series in our blog this year that deliver our 2 cents on all that’s in the market place. Stay tuned.

The Entrepreneur's Accountant