Accounting Dashboards & Analytics: Top 3 things that you should know

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The main aim of dashboards in Accounting software is to provide at a glance, an overview of the healthiness of business operations. Managers love them and in fact, if most influencers of ERP purchase decisions were honest, they will admit that their decision on which ERP software to go with was heavily influenced on how pleasing to the eye the dashboards they saw during product demos were. Dashboards are important and have their place in the management of business, but running a business based solely on dashboard figures alone is like a football coach making decisions on how the team should play based on the scoreboard and subsequent statistics .Any coach worth his pay check knows that this is not how games are won. The same advice applies to the successful running and growing of business. Today we'll look at some considerations when evaluating the dashboards and analytics of ERP software.

#1 How dashboards are accessed

The question as to how data from dashboards is accessed may seem not relevant but is often an overlooked criteria by most businesses when evaluating ERP software. The data from dashboards can be of the highest quality and exactly what is required to make that all important decision for the business, but if it doesn't timeously come to the attention of the decision maker, then its worthless and is absolutely of no value. Book keeping should not be an end to itself but should be an activity that provides guidance and direction for future business expansion and growth.

What we love about ERPNext’s dashboards is that decision makers do not have to logon to the ERP software in order to stay on top of developments in the business. This is ideal as some decision makers just do not have the time as they are focused on activities that grow the business further. This by the way, is the ideal in business.

Critical data on ERPNext is automatically emailed to recipients on a daily, weekly and monthly basis; all depending on the metric being tracked. Out of the box, ERPNext provides the following business indicators which are emailed directly to users' inboxes where they are more likely to access them in their conduct of other business functions: ERPNext provides:

# 2. Garbage in = garbage out

Dashboards are only as good as the underlying data from which they are drawn. As the old adage goes, garbage in = garbage out. Besides considering the quality of data input to the system, what is often overlooked is that the data shown on dashboards is after the fact that the transaction has occurred. Whilst it’s good to know this, what is better in some cases is actually stopping the erroneous transaction from happening in the first place. This applies to both expense and income generating transactions. Whilst it is obvious to expense transactions, the less obvious transaction type that may sometimes need to be prevented is that of sales. Factors as the customer's credit worthiness must be considered before a service or product is provided by a business to a customer. The closing of sales without consideration to a customer's credit rating has landed many businesses in troubled waters when customers have not been forthcoming with payments. This situation is characterised by businesses with fantastic sales figures but disproportionally large bad debts. The only winners in such badly run businesses are undoubtedly the debt collection agencies.

Through proactive management of transactions by means of business process workflows, risks to businesses can be mitigated well before they pose a risk to the viability of a businesses’ operations. As mentioned earlier in the football coach analogy, the data from ERP software dashboards cannot be exclusively used to manage businesses but other proactive techniques such as business process workflows should also be employed to get optimum results. Business Process Workflows assist businesses to run better by allowing managers to approve or decline certain transactions based on specific business rules that are designed around factors that the business defines upfront that impact its bottom line

#3. Historical analysis as a basis for future decisions.

As mentioned earlier, dashboards and analytics are important for businesses but over reliance on them without consideration of other factors can be disastrous for businesses. Just because a business has enjoyed success over a period gone by is no guarantee that it will be remain the same in the future. Where there is profit to be made, competition will arise. Competitors can come and undercut the business on both quality and price. An example to consider is the Swedish company, Facit that made the best mechanical calculators at the time and had a monopoly over the market. No household, school or business was without their mechanical calculators. Their machines were adored by customers but what the Swedish company ignored was the rising threats from Japanese electronic calculators. It is said that the engineers from Facit bought the cheap, small electronic Japanese calculators to cross check their own calculations made on their mechanical calculators. These engineers held the future in their hands but stubbornly refused to change their product and leverage their awesome brand to capitalise on the newer technology. In 6 months they went from maxim revenue to being out of business and ceasing operations.