Why Finance Dashboards Never Work

Why Finance Dashboards Never Work

Leaders do vision, they are responsible for the strategy, and then they facilitate the actions everyone needs to take to make the vision happen. It’s always a big job.

The tools they need to do all that are many and varied. Not telling you anything you didn’t know right?

I think, however, that it’s not always clear to leaders what support their accounts people should give them. When you talk to leaders they might mention that they’d love a dashboard that tells them what’s going on. A dashboard that’s always up to date, one they can rely on.

Accounts people should be able to do that but often what gets lost in the translation between the boss and accounts is how to make that happen.

Mention a dashboard to accounts people and they usually, secretly, groan and freak out. I say silently because they don’t ever want to appear unhelpful. They’re like a cattle dog that will run all day and always just want to help you but tell them to do something that they don’t understand and they get unsettled.

The reason dashboards freak out accounts is that they make them try to work out how to do something that falls completely outside normal and very solid accounting processes. Processes we have all relied on ever since we started in accounts. And as boring as it sounds, that principal is good old fashioned double entry bookkeeping. It’s like asking a butcher to use a lawn trimmer to cut up steaks.

I wanted to be an architect: ever since I was very young. I ended up doing an accounting degree because I was unsure what to do at that point and thought accounting would make a good base. It was a great decision in hindsight.

I suspect that was the reason that when I first understood double entry bookkeeping I thought it was one of the coolest machines I’ve ever seen. There is astounding beauty in its robustness and agility.

So, back to the topic. My recommendation, for what it’s worth, is to not ask accounts for a dashboard. Instead ask them for a forecast. Unlike a dashboard, a forecast has to balance. You immediately put them on more familiar soil. All of us need to learn how to do forecasts initially, but once the fundamentals are understood, we can built them using accountant friendly concepts.

Your forecast can include non financial KPIs, but only as long as they add up to a financial result. Eg sales x price or hours x rate.

A good forecast helps you build a bridge between your current position and your vision. It forecasts milestones and resources. As a necessary starting point you need to find where you are right now, and how you got there, so you don’t miss out on anything a static “dashboard” might have had.

Next you should take the opportunity to get other managers to report their forecasts at the same time. Get operations, marketing, sales, HR and admin to produce a regular formal report that all, together build to a report pack. At least monthly. They don’t have to be complex or time consuming. What’s more they are a great way for managers to take time out to be reflective.

Get all the different reports to tie back to accounts forecast. To that great double entry discipline. And there is the bridge.

One word of warning, avoid unnecessary complexity and constant reinvention of the same wheel. Like all fear, try to get people to lean into the challenge. But for accounts, don’t take away the tools they need to help you. Let them add up happily.




Photo by Lechon Kirb on Unsplash