For business users of Microsoft Excel Learn to create Excel dashboards

Business Management

Seven 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!


by Charley Kyd, MBA
Microsoft Excel MVP, 2005-2014
The Father of Spreadsheet Dashboard Reports

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.

The 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.

Kyd War RoomHere's an example that illustrates this point. This image from a Kyd War Room Excel dashboard report shows a page with the sales performance for 28 products. Each chart figure shows the product name and both the actual and target trends for 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 wouldn't be visible 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
business performance.

Kyd War Room Excel dashboardMost 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 Kyd War Room Excel dashboard shows data from several sources. The tables summarize the data so readers can compare numbers easily. And the charts show trends that managers can follow easily. Comparing the performance of competitors or the economy to your internal data can help you to uncover weaknesses and strengths that can improve your future performance.

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 the world.

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
minutes.

Information that managers desperately needed yesterday, can become irrelevant tomorrow.

Kyd War Room Excel dashboardExcel 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 10 minutes to create this report based on the previous one. The data was already available. I just needed to decide what data I wanted to display for each chart.

Such 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 like gold miners working for management. Excel users convert vast 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 insight in the data.

Excel dashboards are designed to be updated easily. As a general rule, here's how you update a report: Open the previous report. Change a date cell to the current date. Recalculate (press F9). Print.

Because Excel dashboards typically take less time to maintain, they leave more time for Excel users to improve performance and increase cash flow.

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 very expensive.

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.

7. Using Excel dashboards reduces reporting errors.

Too many Excel reports are "hand-carved." That is, Excel users start with raw data, then they sort and filter and rearrange and summarize and modify and rearrange some more...until they finally get a result they like.

Is it any wonder that with all this manual activity, the final results occasionally include errors?

On the other hand, Excel dashboard reporting is a repeatable process, which reduces errors considerably. Here's what I mean...

To generate a new report, you add data to an "Excel database", which merely is a workbook with one or more tables of data. Then you open one or more report workbooks, change the report date to the new period, recalculate, and print.

Because you do virtually no work to generate an updated report, you have virtually no opportunity to create new errors in your report. And if the prior report had an error, you'll eventually find and fix it. So this method allows you to ratchet up the acccuracy of your Excel reports.

And when your managers get reports with fewer errors, they'll tend to make better decisions, and thus improve cash flow.

Conclusion

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 will pass.

There's certainly an element of truth to these an other criticisms of dashboard reporting.

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 check out the home page for the Excel Dashboards section of this site.

Free Excel Dashboards


Charley's SwipeFile charts