Financial Accounting Dashbards are similar to what are also used in other areas of business. Dashboarding is a term used in sales, production etc. to visual see metrics which are key to success. These metrics can range from real-time numbers to hourly counts or daily results.
When dashboards are used the often times look like what we would recognize in a car. These are dials and gauges with counts similar to the speedometer, fuel gauge etc.
Associated with the dashboard are also alarms such as you would expect with a car dashboard when the check engine light is used. Drawing attention to metrics that are out of line with established standards.
In business such dashboards obviously appear more “business like” as departments and managers use them to stay on top of the workload.
How does dashboarding compare to benchmarking?
Benchmarking extends the accounting information beyond itself. This is the say that in accounting it is customary to compare and analize trends within a company. This historical review consists of things such as:
- Last month, QT, year to previous QT data trends
- Last month, QT, year to same month, QT in previous years
This comparison could be with totals or line items. It may be trends associated with percentages such as:
- Net Income of Gross Profits
- Total Expense of Gross Profits
- Advertising of Gross Profits
But notice this is an internal comparison of a business with itself. It’s much like the game of golf, you are playing against yourself. This is worthwhile and very necessary but benchmarking is taking the accounting to another comparing the business to it’s industry standards.
Think of it this way. Presume the business has a current ratio or 2.1:1 and this is compared to in recent years ranges of 1.8:1 to 2.1:1 – in other words this is the best the company has ever been in recent history. This is something to be proud of BUT how much pride or accomplishment should be celebrated if the same business was to compare itself using BizBench, using it’s NAICS code to see how it’s 2.1:1 relates to the industry standard of 1.9:1 – Yes, they need to celebrate and keep doing what they are doing. They are doing well but also are above the industry standard.
Using BizBench a company can compare itself to it’s industry standards and in some ways compare themselves to their competitors to see what is going well in the business and what needs attention.
Learn now what BizBench is and what the report looks like – Click Here