Collect & understand data granularity based on your reporting needs
Updated: Apr 21, 2020
The very first step is to get a high-level sketch of the FP&A Dashboard and determine the granularity of information needed. Let’s take an example; the above dashboard has key metrics viz. Revenue, COGS, SG&A, EBITDA which can be sliced by Departments, Months etc. Further, Revenue by key Product category is also displayed. In order to create this kind of Dashboard, it is then paramount that the raw data source should have Sales information sliced by key product category for each month.
Evaluate relevant Data Sources needed for FP&A:
Data sourcing is a crucial step to create any report. Moving on, let’s take a look at how a high-level evaluation of the available data can help you gain insightful FP&A dashboard.
(a) Accounting Data – This is the most common data source which Advisory firms / Financial Consulting firms are generally having access to. There are a few top leading Accounting Tools viz. Xero, QuickBooks, Sage Accounting, FreshBooks etc. which are typically used by Accountants or Financial Advisors for book-keeping and reporting purposes. In most cases, for a simple FP&A Dashboard, almost all of the information regarding historical financial information can be sourced from this data source. Generally, it is best to retrieve information at a general ledger level to get more drill down on the key metrics.
(b) Budget and Forecast Data – Budget and forecast information is mostly maintained in Excel sheets which is obviously very flexible to rolling forecast, budgeting and scenario analysis. We can use the same information in excel as a raw data for in our Dashboards.
For example, in the sample FP&A dashboard, each of the key metrics viz, Revenue, COGS, SG&A etc. is measured against a goal which is currently selected as Budget. Such insightful measures can be easily sourced from an excel sheet which has information on budget and forecast. However, one may need to maintain the Chart of accounts consistent across both the budget and Actual information.
(c) Other Operational Data– Companies will certainly need to integrate the planning, budgeting, and forecasting processes across the organization to gain alignment within each function. This involves aligning with operations, sales and finance on key business drivers, planning procedures, internal and external data reliance, and management analysis.
Getting a Dashboard created is not a Techie's job and it needs a participative approach from Business Users, Management consultants, Financial Advisors, and BI analyst to understand the information required to create insightful embedded Analytics.