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Using Financial Dashboards for Operational Management

Matthew Lange
Educational Opportunities: 
Grain, Dairy, Swine, Beef, Timber
Home > Education & Events > September 2017 > Using Financial Dashboards for Operational Management

Dashboards are really important tools that we use in our daily lives. Have you considered developing one for your farm’s financial records? Just as the dashboard in our vehicle displays the speed we're going, monitors our fuel in the gas tank and even tells us when we need our next oil change, business dashboards help us monitor operational performance and productivity at a glance.

Farm dashboards include tools like yield monitors, livestock tracking, equipment efficiency monitors, functions that record input costs, expenditures and a variety of other utilities. What about a dashboard that focusses on your financials? Having the ability to quickly assess your business' cash position — specifically treasury management — and truly understanding your cash obligations are critical to managing your daily business functions.

Many companies and service providers offer dashboard software packages that incorporate these stats and more, but you don’t have to be fancy or spend a lot of money in order to leverage a financial dashboard for your business. All it takes to create your own dashboard is a simple spreadsheet with some key items.

1. The very first entry to record on a regular basis is your checkbook balance. Set up a schedule to input that balance on a weekly or monthly basis. Then, as time goes by, analyze trends. Is the balance going up? Is it trending down? Do you see any patterns?

Other factors to consider is the impact your checkbook balance has on your business. How much is flowing through, what areas of your business require the most cash? Do specific line item cash outflows appear to be proportional on a monthly basis or do they require more cash some months and less other months? Are you able to meet all your bill payments and expenses from your checkbook reserves, rather than through an operating loan?  Doing this on a regular basis allows you to better manage your cash flows and if you aren’t cash flowing, knowing how much you actually need monthly to balance your cash requirements.

2. The second item to monitor is your operating loan balance and fund availability. It’s not just what the balance is today. It’s also important to understand how much you have available for the coming months. For example, is the operating loan also coming due? Visiting with your lender about the position of your operating loan and your cash needs going forward is key. Your lender will be looking to you for as much guidance in what you need as you will be looking to them for help. Your dashboard will help you identify whether the amount of the operating loan is appropriate for the needs of your business or if debt needs to be re-evaluated in order to improve cash flows.

3. Next are payables and receivables. Payables are any bills at the end of the month (or end of the period) that were left unpaid. Typically, most vendors — but not all — allow for thirty day payables.  Keeping track of those that may have built up over time is imperative. Capture who you oww, payment due dates and the amount you owe them.

Receivables are the money potentially owed to you for services, commodities and the like. Tracking how much cash coming into the business to offset payables, invest in the business or add to your capital reserves will enable you to protect your business when unexpected cash needs arise, allow you to take advantage of opportunities that come your way, and deliver added peace of mind.

4. Finally, take a look at non-monthly, or seasonal types, of expenses, both incoming and outgoing. These really impact your cash flow. On the positive side, maybe you’re going to sell some soybeans in the next couple of weeks or you’re expecting an insurance payment. These types of receivables can bring in a lot of cash. On the other side of the ledger, perhaps a large custom operating bill or manure hauling invoice comes due or it’s time to pay your year-end cash land rents. Recording cash inflows and outflows help you cross-check with your checkbook and operating loan availability to give you a solid picture of your financial position at any given time.
EXAMPLE Dash Board July August Comments
Checkbook Balance $90,000 $60,000  
Operating Loan Balance $170,000 $190,000  
Operating Loan Available $30,000 $10,000  
Payables $50,000 $80,000 Fertilizer, Seed, Feed
Upcoming Major Cash Needs
Chemical Bill
Land Rent
Due end of September
Due November 1

Using the above sample, what analysis can you draw from this dashboard?

Consistent, reliable information, continuous monitoring, and taking action is essential to any successful business. Sit down with your accountant or bookkeeper to create and customize a dashboard that works for you. Don't wait until the check engine light comes on to deal with cash issues in your business. Take action now, work with your lender, and monitor your financial performance indicators on a continuous basis.
Matt Lange is a Business Consultant at Compeer Financial. For additional insights from Compeer industry experts or to learn more about our programs addressing, feel free to check out additional insights at
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