If you are like many eCommerce entrepreneurs, your business’s financial data is spread across a number of places, from Shopify and Amazon Seller Central to your cloud accounting software and various spreadsheets.
This means that every time you want to consult the data before making a decision, you are going on a scavenger hunt. This is not only time-consuming, but it is also a recipe for not having confidence in your numbers.
A better solution is to use a financial performance dashboard.
In this post, we’re going to examine the top 7 benefits along with a few of the most common dashboard mistakes.
What’s a financial performance dashboard?
A financial eCommerce dashboard template gives you deeper insights and clarity around the core KPIs in your eCommerce business. When built well, it puts the spotlight on the metrics that directly contribute to your bottom line. You and your team can see how different initiatives contribute in a matter of a few minutes of looking at the dashboard instead of spending hours building custom reports in Excel Hell.
Let’s use average order value as an example. As the owner, you might want to know that you are not leaving money on the table with each order. Your marketing team will want to know if the new bundle deal that they launched is leading to larger checkout orders. And, your CFO or controller might want to see how this new bundle deal affects not only average order value but gross margin.
Examining the top 7 benefits of using dashboards
1. Get a bird’s eye view of all key performance indicators in your business
This is the biggest advantage of using dashboards over spreadsheets and custom reports. All of your most important metrics are at the top of your dashboard front and center.
2. Save time
As we mentioned above, one of the biggest times sucks is having to go to multiple sources – be it Shopify, Amazon Seller Central, Google Analytics, and Xero, just to get individual pieces of the data you need to make a decision.
For example, if you want to know if sales increased in Q2, you might need to pull revenue numbers from Shopify, Amazon, wholesale orders, etc.
Instead, you can sync all of your data feeds directly to your eCommerce dashboard. This will pull in the information in real-time, so all of the important data is in one place.
3. Monitor sales numbers
Another advantage is that you never have to guess what your sales numbers are. Many eCommerce business owners make a habit of checking their sales dashboard to start each work day.
This allows them to work “on” the business instead of “in” while still staying close to the numbers.
While you don’t necessarily have to check your financial dashboard daily, it is a great idea to check it at least weekly.
4. Increase profitability
In addition to sales numbers, we recommend tracking business profit in a dashboard – both for your company as a whole as well as individual product lines or SKUs.
When you are looking at it on a regular basis, you’ll be able to see if you are on track. You can make adjustments faster if you see that you are veering away from your target profitability range.
5. Keep your team motivated and accountable
We recommend making at least one of your financial performance dashboards accessible to your team.
While you can decide how much you want to share, there are many advantages to at least sharing some things with your team, including:
- When they see the dashboard example, they can see how the work they are doing directly contributes to the bottom line.
- They will feel more motivated to do great work and may even feel a sense of ownership in the company.
- They will be more likely to suggest new ideas that could further improve the bottom line.
- They always have an idea of where they stand in the company. They can see if they are crushing it or if their manager might soon reach out to have a talk about their performance.
6. Reduce the amount of time putting together detailed reports
Do you know what’s worse than reading a 30-page financial report? That’s having to spend the time creating the 30-page report instead of you know, focusing on growing the business.
Dashboards solve this problem. You spend the time mapping out your dashboard template and deciding what metrics you want to track upfront, and then you don’t have to do it again unless you change any metrics.
7. Eliminate analysis paralysis
As a founder, you have to make a lot of decisions every day. Decision fatigue is real. Anything you can do to eliminate or simplify a decision can go a long way. A dashboard example can help you make faster decisions because you have all of the important eCommerce KPIs in one place, and they are up-to-date.
Avoid these 3 common rookie dashboard mistakes
Now that you are sold on creating a dashboard, here are three of the most common mistakes that we see businesses make.
Use dashboard software
Many people try to DIY their first dashboard or two. They grab all of the data and build it in Excel or Google Sheets. That’s all fine and good until you have to import data each week of something in your custom dashboard breaks. This dashboard that is supposed to save you time each work on reporting is now creating even more work for you.
This is totally unnecessary considering how many great free and paid dashboard software options are available. Save yourself the headaches and build your first dashboard using software.
Know your goals before you build your dashboard
Another common mistake is that they get so excited to build their dashboard that they literally throw the kitchen sink in it. The result is a cluttered mess with dozens of charts, graphs, and tables crammed on the screen.
The dashboard is so overwhelming to try and decipher what’s happening that you need a magnifying glass and a shot of whiskey before you dive in.
Instead, we recommend spending the time upfront to choose the top metrics you care about. These metrics should be front and center and above the fold on your dashboard. Anything else you include is a “nice-to-have” and should be below it.
Obsess over style instead of substance
It is great to spend time on the dashboard design. However, this should be secondary to the actual data and metrics you are tracking. Any design elements you include should make it easier to see what’s happening on your dashboard, not distract from it.
In sum, there are so many benefits of setting up a financial dashboard. It goes a long way to help you know your numbers without having to spend hours and hours looking at custom reports and spreadsheets.
Author: Wayne Richard
Bio/Blurb: Wayne is a management accountant who forged a 15-year career with tech heavyweight Hewlett Packard before starting his own cloud accounting firm in Tucson, Arizona. Fate (and the Internet) brought him to discover Bean Ninjas via a blog post. Two years later and Wayne’s involvement with Bean Ninjas had grown from a blog comment to contractor to equity partner.
When Wayne isn’t managing a global team and equipping entrepreneurs with the financial tools they need to enjoy business success and lifestyle freedom, he’s being an everyday superhero to his wife and five children.
Wayne is Bean Ninjas’ resident eCommerce expert.