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Six Ways Excel Dashboards
Can Improve Cash Flows
You can create great-looking dashboards with Excel. But can the
dashboards improve business performance? You bet they can!
To be honest, dashboard reporting often is a complete
waste of time and money.
Too often, dashboards require over-priced software, run on expensive
computers, and maintained by high-paid programmers. These reports are
as flexible as a hole in the ground, and as about as informative. But
gosh they're pretty!
As an old CFO, those aren't the kind of dashboards that I ever would
allow in my company.
However, dashboards -- particularly, Excel dashboards -- really can
help to improve the measure that's near and dear to every CFO's heart:
the Net Present Value of future cash flows.
There are at least six reasons this is so.
1. Excel dashboards can communicate more information, more
quickly, than can any other reporting format.
better your managers understand your company, its market, and its
operations, the better decisions they will make. Your sales will be
higher; your costs will be lower; and your cash flow will improve.
Here's an ugly example that illustrates this point. (Click
here to see the full report.) This image shows a page with the sales performance for 110 products.
Each tiny figure includes the product code, two key metrics, and a chart of the
most-recent 13 months of performance.
Managers can quickly scan this page to identify the products
doing well, and those doing badly. They can compare the performance of related
products And they can look for patterns in performance that would be
invisible if they were looking at a typical stack of numeric reports.
This understanding gives managers information they need to make the
changes necessary to improve performance, and thus cash flow.
2. Because Excel dashboards can compare any number of
measures in one report, they can provide a complete picture of
management reports provide a microscopic view of what happened,
with no hint about why.
To understand why, managers often need reports that compare internal data from Accounting
and Sales and Operations and more. They also need relevant
external data about competitors and customers and the economy
and so on. Comparing many sources of data helps managers to find new patterns of performance, make better decisions, and improve cash flow.
To illustrate, this figure shows a page from an Excel dashboard of financial data available free from Hoovers.com. Hoovers provides
financial information about more than 40,000 companies, some of which
are your competitors, customers, and key vendors. Comparing their
performance to yours can help you to uncover weaknesses and strengths that
can improve your future performance. (Click
here to see the full report in color.
here to see a similar one in black and white.)
That is, Excel dashboards help you to understand and improve business performance, and thus cash flow.
3. Excel dashboards save managerial time.
Most reporting systems work as though managers had all the time in
Some systems produce tall stacks of reports for managers to
slog through. Others display a series of screens with small chunks of
information, and with long delays between each screen.
But printed Excel dashboards allow managers to scan a massive amount
of information in seconds. This gives managers the time to ask
questions, improve their understanding, and then find ways to improve
performance and increase cash flow.
4. Excel users can modify Excel dashboards quickly, often in
Information that managers desperately needed yesterday, can become
Excel users can modify dashboard reports quickly to keep up with
their managers' changing information requirements. Often in minutes,
users can change an Excel dashboard and provide an updated copy.
Even the report format can be changed quickly. To illustrate, it took
me about 15 minutes to convert the previous dashboard format to the one
shown here. (Click here to see the
quick response reduces the burden on IT, and it provides managers the
updated information they need to improve cash flow.
5. Excel dashboards save Excel users' time.
Excel users are the eyes and ears of management. They convert random
mountains of data into nuggets of useful information.
Excel users are most valuable when they look at data in new ways to
find new opportunities to improve performance. But when Excel users
spend all their time updating old reports, "turning the crank", they
have no time or energy to uncover new opportunities.
Excel dashboards are designed to be updated easily. As a general
rule, here's how you create a new month's report: Open last month's
report. Change a Date cell to this month's date. Recalculate. Print.
Because Excel dashboards typically take less time to maintain, they
leave more time for Excel users to improve performance and increase cash
6. Excel dashboards are darned near free.
Excel dashboards use a product you already own. Most other dashboard
solutions require that you purchase software that often can be
That is, the incremental software cost of Excel dashboards is zero.
And a cost of zero certainly is the kind of cost that helps cash flow.
It's easy to trivialize dashboards. They're merely a way to make
reports pretty, some say. They're a way to spoon-feed information to
managers who don't understand the data. They're an expensive fad that
There's certainly an element of truth to these an other criticisms of
But more significantly, dashboards provide a shortcut to management
insight...and that always is worthwhile. And Excel dashboards provide
the flexibility and low cost that every company needs.
To read more about Excel dashboards in general, check out our
page for the Excel Dashboards section of this site. To learn how to
create your own Excel dashboards, and to receive working examples of
Excel dashboards, check out
How to Give Your Managers More Insight, More Quickly, Using Less Time and Money.