What are the 10 KPI’s that every CFO Dashboard must have?

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Any Canadian business looking to stay competitive by making real-time data driven decisions needs to align itself with systems and tools that allow quick and effective decision-making. A business dashboard that has the right Key Performance Indicators (KPIs) can give you full access into the entire scope of a business at a glance.

For the critical role of a Chief Financial Officer (CFO), having a dashboard gives instant insight into all business operations and helps it stay afloat with the right financial and business decisions.

Characteristics of an Effective CFO dashboard includes:

  • The ability to quickly disseminate information on all aspects of a business
  • Easy to make changes
  • Monitors the right set of KPIs

Key Performance Indicators, or KPIs, help determine the condition and sustainability of your current business model. It also provides a full view of your company’s financial landscape and increases your competitive advantage.

The top 10 KPIs for every Canadian CFO Dashboard for the next year are the following;

1. Working Capital KPI

Immediately available cash is known as Working Capital. Analyze financial health by reading available assets that meet short-term financial liabilities. Working capital, calculated by subtracting current liabilities from current assets, includes assets such as on-hand cash, short-term investments, and accounts receivable.

2. Operating Cash Flow KPI

The operating cash flow KPI helps you to monitor the financial health of your business. In analyzing your operating cash flow KPI it’s important to compare it to the total capital employed. This analysis allows you to find out if the operational aspect of your business is producing enough cash to sustain the capital investments that you are putting into your business. The operating cash flow to total capital employed analysis allows you to dive a little bit deeper into the financial health of your business beyond your profits.

3. Current Ratio KPI

Your company needs to pay financial obligations on time. The current Ratio takes your assets, such as account receivables, and current liabilities, including accounts payable, to help you understand the solvency of your business.

4. Payroll Headcount Ratio KPI

How many of your employees are engaged in payroll processing? The Payroll Headcount Ratio displays the number of employees your company supports per dedicated full time employee.

5. Return on Equity KPI

The Return on Equity (ROE) KPI measures your organization’s ability to generate revenue for each unit of shareholder equity. The return on equity ratio not only provides a measure of your organization’s profitability, but also your efficiency. A high or improving ROE demonstrates to your shareholders that you’re using their investments to grow your business.

6. Quick Ratio/Acid Test KPI

Measure the ability of your organization to meet short-term financial obligations. The Quick Ratio offers a more conservative assessment of your fiscal health than the current ratio because it excludes inventories from your assets.

7. Debt to Equity Ratio

The Debt to Equity Ratio measures how your organization is funding its growth and how effectively you are using shareholder investments. A high debt to equity ratio is evidence of an organization fuelling growth by accumulating debt.

8. Accounts Payable Turnover KPI

Accounts Payable Turnover shows the rate at which your company pays off suppliers and other expenses. This ratio is important for understanding the amount of cash that your business spends on suppliers during any given period.

9. Accounts Receivable Turnover KPI

The problem in maintaining a large bill for a customer is that you are essentially offering them an interest-free loan. The Accounts Receivable Turnover KPI measures the rate at which you collect on outstanding accounts.

10. Inventory Turnover KPI

How often you are able to sell off your entire in-stock inventory in a given year should be measured with your Inventory Turnover KPI. Closely related to your supply chain, this KPI indicates the ability of your organization to generate sales and increase revenue.

What other KPI’s are important?


There are a few other important KPIs that you could include in your dashboard:

Net Profit Margin KPI

The Net Profit Margin KPI measures how effective your business is at generating profit on each dollar of revenue you bring in. This financial KPI is a measure of the profitability of your business and is instrumental in making long- and short-term financial decisions.

Gross Profit Margin KPI

The Gross Profit Margin measures your profit on each dollar of sales before expenses.

Finance Error Report KPI

Finance reports that require clarification or contain obvious errors can be analyzed for further investigation via Finance Error Reports.

Payment Error Rate KPI

The Payment Error Rate is a percentage of incoming or outgoing payments that were not completed due to a processing error – no Purchase Order referenced, no approval, documentation missing, etc.

Budget Variance KPI

The Budget Variance in projected budget totals compared to actual operating budget totals.

Line Items in Budget KPI

Total number of Line Items in Budget shows the amount of detail included.

Budget Creation Cycle Time KPI

The Budget Creating Cycle Time includes the number of days needed to research, produce and publish the firm’s budget.

Expense Management KPI

The percentages of travel and expense vouchers submitted by employees that contain an error – insufficient documentation, wrong charge code, or no receipt – are tracked through Expense Management KPI.

Internal Audit Cycle Time KPI

Management and stakeholders can view the amount of time required to perform a full internal audit on Internal Audit Cycle Time reports.

Customer Satisfaction KPI

CFOs often consider budget and time targets, as benchmarks for successful project delivery, and while those KPIs are important, the ultimate test is customer satisfaction. The Net Promoter Score is a simple and effective measurement of how well you are serving your clientele.

What are the 10 KPI’s that your Dashboard must have in 2016? They are different for everyone. You must determine the ones that are important for you and your individual company as follows:

Step 1 – Don’t use them all!

Step 2 – Choose 8-10 and build the data collection and reporting of these top KPIs into your weekly reporting routine. It is easiest to setup a spreadsheet where you track the data and then create a set of graphs so you can see improvements. Remember, you can modify your top 8-10 KPIs every six months or so as you focus on new areas of your business – but start by setting up, and then stabilizing, a few at a time.

When deciding which 8-10 are the most important make your choice based on your current business strategy for profitable growth offset with reducing risks to the business.

Step 3 – If you are a big enough business to have departments then the top 8-10 you will choose have to reflect the general evaluation method of each department; however every department should also have its own top 8-10 which more heavily reflects their departmental focus.

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