Power BI Financial Dashboard for SMEs: What Should It Include?

Managing finances can be a major challenge for small and medium-sized enterprises (SMEs) as their business endeavours expand. Business owners must keep track of their revenue, costs, cash flow, profit, and debts. For that, they need to know how the business is doing. However, financial information is often stored in separate electronic spreadsheets, accounting software, bank statements, and reports from the departments. Hence gathering all this data manually takes time and makes monitoring finances inconvenient.

This is where the implementation of a Power BI financial dashboard comes in handy. It enables obtaining financial information and working with complicated information for generating interactive reports and visualization. Because of this, rather than searching for different documents, business owners can track key financial metrics at one place. But what should a good Power BI dashboard feature? Let us review its major components.

What Is a Power BI Financial Dashboard?

A Power BI financial dashboard refers to a type of visual reporting tool that displays the most crucial financial information in the form of graphs, charts, tables, and important KPIs, such as revenues. The dashboard is able to connect various data from different sources, starting from accounting software to Excel spreadsheets and sales systems as well as financial databases.

For the small and medium-sized organizations, this tool helps to facilitate the process of financial reporting and enable the management to monitor trends, spot risks, and make effective decisions. A good dashboard must have a specific focus on the data important to the owners of the business instead of simply showing every available financial indicator.

7 Essential Components of a Power BI Financial Dashboard for SMEs

1. Revenue and Sales Performance

Business owners are typically keen to track revenue as the very first metric of growth. However, total sales alone is not enough to evaluate business performance.

What it should show: A revenue dashboard should have information about total revenue, sales for the month and quarter, revenue increase, revenue by customer, and revenue by product. Moreover, it is important to compare the current data with the previous periods.

 How it helps: With this data, the business owner will be able to determine the most successful products and services of the company, watch general fluctuations in revenue, and analyze whether the sales tactics work as expected.

2. Expense Tracking and Cost Analysis

As companies expand, operating expenses, including salaries and wages of employees, rents, marketing costs, software licensing, and other administrative costs may experience an increase. If not closely monitored, these rising costs may put a strain on the company’s profits over time.

What it needs: The dashboard that tracks spending should have expense categories, the ability to illustrate monthly spending trends, highlight the main expense categories, and allow comparing actual spending with the initial budgets.

How it can help: The owners can see where expenses are facing a trend to be growing or other inexplicable and unnecessary costs arise.

3. Profitability Analysis

The focus on revenue enhancement should not overshadow that of profit augmentation: companies should realize what is their net income after deducting variable and total costs.

What it can show: They can take gross profit, gross margin, profit from operations, net profit and net profit margin as key indicators. Their dashboard can also depict return figures, as well as profitability created by a certain type of product, service or client.

Benefits received: The entrepreneurs will be able to find out what actions bring them the greatest profitability, and what segments show the decrease in profitability in return.

4. Cash Flow Monitoring

The significance of cash flow lies in the fact that SMEs might face liquidity difficulties stemming from delayed payments by customers and growing expenses even if they are operating successfully.

A cash flow dashboard should consist of data about the opening and final balance of cash, cash move-ins and move-outs, cash used in the operations, future receipts from customers, as well as due payments. This dashboard should also incorporate a short-term cash flow forecast when feasible explanations are provided.

It allows owners to keep tabs on their cash management and define possible cash shortages. For instance, should invoices not paid for a while be present while payments to suppliers are approaching, the cash flow dashboard can inform the management of the occurrence of the cash deficit.

5. Accounts Receivable and Accounts Payable

Late repayment of receivables from customers, as well as improper payments to suppliers, will result in problems with working capital and complications in the daily functioning of the business.

What is necessary: The dashboard should reflect the outstanding invoices from customers, pending receivables, invoices’ age, upcoming payments to suppliers, and the total amount payable to suppliers. Among the main indicators that can be used are Days Sales Outstanding (DSO) and Days Payable Outstanding (DPO).

Why is it useful: The entrepreneurs will be able to determine the companies that tend to delay their payments and, hence, plan the collection and payment procedures properly, thus improving the visibility of the working capital.

6. Budget vs Actual Performance

Making a budget is just the beginning. Organizations should consistently check their actual financial performance statistics against the budgeted amounts in order to see if they remain on track with their budget.

What the dashboard should show: A budget dashboard compares real income, expenses, and profitability of the company to the budgeted numbers. It shows information is about any financial discrepancies as well as the percentage differences and tendencies for the time of a month or a quarter.

Benefits: The management will be able to analyze overspending, revenue deficits and unexpected changes of the company’s financial results. In turn, it gives an opportunity for the founders and the management to adjust budget expenditures and make all necessary changes if the real performance data is different from what was planned.

7. Key Financial KPIs and Management Summary

By providing significant financial metrics in one place, a financial dashboard saves founders from scanning different reports and allows them to get the complete picture of business performance.

Some of the metrics to be included: The organizational summary must show the total sales, gross profit margin, net profit margin, operating expenses, cash balance, accounts receivable, and working capital. Additionally, industries may determine more KPIs to use depending on their specific growth targets.

Value of the solution: By accessing the financial statement in a summarized form, founders can quickly learn about the financial performance of the company and figure out the areas that require attention. It is also possible to use the interactive filters, which enable them to take a deeper dive into analyzing business information with a focus on a particular period, department, customer, or type of expense.

How SMEs Can Build an Effective Power BI Financial Dashboard

In order to efficiently create an appropriate dashboard, one must know what data the management needs to oversee. Companies should start with determining the required financial reports and getting complete insights into the information collected by the accounting and banking systems and other data sources.

The next step would be establishing a common approach to the use of financial categories and KPIs. Connecting the relevant sources of data to Power BI and automated data update, is also part of the process of constructing a useful dashboard.

Finally, do not overload the dashboard but only use the most significant financial indicators in a clear way so that the management can understand the actual situation.

How BudgetMaccha Can Help

BudgetMaccha aids new ventures and growing SMEs in improving their financial operations using their finance execution, process improvement and automation, FP&A, and management reporting solutions.

Assisted by automatically generated MIS reports and Power BI dashboards, BudgetMaccha helps businesses manage their financial information in such a way that they make the manual process much easier and also significantly boost financial visibility along with the management of cash flows, profit, cost, and revenue.

Conclusion

Power BI financial dashboard allows SMEs to break away from disorganised spreadsheets and manual reports. With basic elements such as revenue tracking, expense analysis, profitability, cash flow, account receivables, account payables, and budget variance, business people can move forward and see their financial situation clearly.

At the same time, the success of the dashboard is contingent on accurate information, correct KPI selection, and reporting on a regular basis. Hence, SMEs should aim to build dashboards which focus on their business issues rather than simply displaying numerous figures and charts on screen. When they have the necessary financial information and automated reporting, entrepreneurs will be able to respond to the possible risks quicker, take control over the financial situation, and make the right decisions for long-term development.