In the second article of series on dashboards (here’s the first) we are going to go through the basics of setting up a data dashboard. Dan Fairbairn from Ocius Digital, a consultancy which sets up dashboards and other apps for businesses, gave a firsthand walkthrough of the steps involved.
There are several dashboard apps out there with different strengths but for this exercise we used Crunchboards because it has a demo company that will show its data in the dashboard. (The demo company is actually from online accounting company Xero, to which Crunchboard connects. Fathom also has a great demo with 10 companies, but the Xero demo can be reset more easily.)
The logic in this walkthrough applies to other dashboards such as Fathom, Spotlight Reporting, Duckboards and Geckoboards. The goal is to define what metrics you want to see and size the display to emphasise the most important numbers.
An accountant assisting clients can set up several dashboards for businesses of different sizes and industries, and reuse them as needed.
Steps to Set Up a Dashboard
Before you set up anything, watch Crunchboard’s introductory video to get a feel for the flavour of the app. Done that? Ok, let’s get underway.
Sign up for the trial (free for 14 days) and log in. Comments by Ocius’ Dan Fairbairn.
1. Open Boards. Add a new board. We’re going to set up a professional services dashboard first.
2. Go to Board. Always check the name of the dashboard and that you’re editing the board you think you are. It’s easy to get mixed up with multiple dashboards and you can start making changes on the wrong board.
A warning about opening up different boards with tabs in your browser: if you click to another tab with a different dashboard, the original tab is going to update to the new dashboard.
3. Click Edit. Add a card. Choose the Report. Let’s pick a P&L, the lifeblood of a business. Name the card and call it Profit & Loss.
Naming is important – you want to know instantly what the numbers are you’re looking at later. Make sure that you’re naming it correctly and wisely.
4. Resize the card. If it’s the most important thing in your business, stretch it across a large part of the screen. Make it something you can’t miss.
5. Select the accounting software program you want to connect to. Select actual or forecast data. Show actual before forecast.
6. Choose the chart. Large column charts waste a lot of space; you don’t want big gaps between columns because it makes it harder to compare. We’re going to choose Spline.
Then select date range. Make it per week, not per month, and going back for the past four months.
7. Add accounts. Click on Reports, add Cost of Sales and Expenses. Only add essential accounts – you don’t want to overwhelm the dashboard with data.
8. Add a formula. Find a formula of use, eg. Net Income or Gross Profit, and add it to the card. You can add or vary a formula such as net income per employee. Consider adding things from other sources. Eg. importing from Excel.
9. Click on Display. Deselect individual accounts and only include account categories, formulas.
10. Add another card. Select Profit & Loss, but this time set the period to 12 months. You should set the period to whatever makes sense for your business. If you’re turning over food you should look at it daily or weekly. Find the spikes.
11. Compare cards. Watch your weekly performance over three months and compare it to the 12-month graph. Do you know why they’re similar or different?
12. Go into Advanced on Card. Deselect % growth. This reduces the width of the report.
13. Add forecast. Go through the same procedure of adding another card but this time select Forecast instead of Actual. Now you have a simple numbers summary of your performance to date.
Telling a story several ways can make it easier to understand what’s happening in the business.
And you’re done. Now you have a basic dashboard to give you a quick glimpse of the financial health of your business.
Some general tips.
- Make sure you change one thing at a time. If you change the colour, scale and size all at once then things can get confusing. Colours that are similar will blur; choose higher contrast.
- Reduce unnecessary numbers. Do you need to have variance and percentage growth? The more clutter on the screen, the harder it is to read. Use consistent colour all the way through, and highlight only the points of emphasis. If there’s a week when profit is low you can spot it and examine.
- Reduce scrolling. Try to have widgets sized so you don’t have to scroll sideways to read them.
The key to a successful dashboard is one that gives you information about your business that you can act upon. What questions does the chart raise?
Too many businesses spend a lot of time getting the data and doing the report, Fairbairn says. “By the time you’re finished you can’t get the insights out of the data.”
Don’t be shy to create several dashboards. Group all your sales metrics in one dashboard and all your operations in another. Monitor monthly performance and compare to the quarter and to the year.
Once you have your dashboards in place you will have a much clearer picture of the health of your business.
Next: We look at setting up a dashboard for an accounting practice.