What’s a CFO KPI?

What’s kpi in enterprise? A CFO Key Efficiency Indicator (KPI) or metric is a quantifiable excessive stage measure of monetary efficiency. These KPIs might be thought-about a particular subset of monetary KPIs, used to assist a CFO make knowledgeable selections that steer their firm in the suitable route. These efficiency metrics can be used to measure an organization’s monetary efficiency relative to opponents in the identical business. Publicly traded firms publish this data in quarterly experiences for buyers.

What KPIs Ought to be in a CFO’s Dashboard?

To find out what CFO KPIs are essential, we must always first take a look at what CFOs must cope with frequently. Most CFOs must cope with two main duties at work aside from attending hundreds of conferences – making essential monetary selections for the corporate, and monetary reporting. To assist a CFO with these duties, a really particular set of monetary KPIs have grow to be commonplace and are thought-about normal follow. Fortunately, a number of the KPI gurus at insightsoftware have made a tidy little record for us.

Listed below are the CFO KPI examples that we are going to be going over on this publish:

• Fast Ratio
• Present Ratio
• Working Capital
• Working Money Circulate
• EBITDA & EBITDA Progress
• Return on Fairness
• Complete-Debt-to-Fairness Ratio
• Accounts Payable Turnover
• Money Conversion Cycle
• Gross Revenue Margin
• Earnings per Share
• Compound Common Progress Fee
• Worker Depend
• Curiosity Protection Ratio

Whereas this record is just not extraordinarily lengthy, it does require numerous information and information processing to generate these KPIs. Most firms will make use of CFO dashboard software program to automate the whole information gathering, processing, and visualization course of. Listed below are a couple of of the completely different dashboards that insightsoftware has to supply:

Topsheet Month vs Finances Instance CFO Dashboard

Get your individual customizable copy of this dashboard template totally free right here.

This dashboard has been particularly tailor-made to fulfill the factors of a CFO KPI dashboard. All the important thing monetary data for day-to-day operation is entrance and heart, with month-to-month and quarterly tendencies obtainable at a look. This high-level monetary overview makes use of predefined narrative template performance to supply data in an simply consumable format, in addition to enabling the CFO to inform the story behind the numbers.

CFO KPI Overview Dashboard Instance

Get your individual customizable copy of this CFO dashboard template totally free right here.

For these C-Ranges who love taking a look at information on a regular basis, now we have additionally developed an government stage KPI dashboard. This can assist you rapidly establish areas of the enterprise that want fast consideration, enabling you to treatment the scenario earlier than it will get out of hand. This KPI dashboard makes use of CXO Software program’s signature ‘efficiency tiles’ characteristic, dynamic waterfall charts, and drillable tables to provide the most related data in a user-friendly package deal. Get extra data on this dashboard right here.

KPIs and Metrics for the CFO’s Dashboard

The mantra of the company world is “time is cash”. With this in thoughts, you possibly can perceive why a busy CFO would need monetary data obtainable immediately. This has been the driving pressure behind the event of CFO KPI dashboards and their implementation as normal follow. Listed below are 13 CFO KPI examples you possibly can count on to see on a CFO dashboard.

1. Fast Ratio – The fast ratio is likely one of the mostly used CFO KPIs. It lets you rapidly assess the monetary well being of your organization. This well being examine is completed by measuring an organization’s potential to instantly fulfill its quick time period monetary obligations. This monetary metric must be entrance and heart on a CFO KPI dashboard. Fast Ratio = (Money + Marketable Securities + Accounts Receivable) / Present Liabilities
2. Present Ratio – This CFO metric is usually used alongside the fast ratio when assessing the monetary well-being of an organization. Much like the fast ratio, it measures the flexibility to cowl monetary obligations. Nevertheless, this monetary metric has an extended time horizon related to it, checking to see if an organization will pay its obligations inside one yr.
   Get your individual customizable copy of the Present Ratio dashboard template right here.
3. Working Capital – Most CFOs prefer to keep watch over the quantity of working capital their firm has, as this represents how a lot they’ve at their disposal for growth. This CFO metric is greatest used along with the working money circulate KPI when contemplating aggressive development alternatives. Simply keep in mind, a money strapped firm is just not a wholesome firm.
   Get your individual customizable copy of the Working Capital dashboard template right here.
4. Working Money Circulate – As its identify implies, this monetary metric measures how a lot money circulate is being generated from day-to-day operations. Because of the great amount of information that’s usually related to this metric, it’s best tracked utilizing CFO dashboard software program. As talked about earlier, CFOs use this data when making CAPEX selections. A optimistic money circulate can be considered positively by collectors offering exterior financing for CAPEX.
   Get your individual customizable copy of the Working Money Circulate dashboard template right here.
5. EBITDA & EBITDA Progress – Incomes Earlier than Curiosity, Taxes, Depreciation, and Amortization. It is a crucial metric in the case of CFO reporting every quarter. It’s usually used in its place to internet revenue because it removes any bias brought on by strategic accounting. Most firms make use of monetary reporting software program to trace this monetary efficiency metric because it requires numerous information crunching.

6. Return on Fairness (ROE) – As an investor or enterprise proprietor, you care about how effectively your cash is being utilized. This CFO dashboard metric is designed only for that goal – it assesses the effectivity at which shareholders’ fairness is getting used. As such, this metric is extraordinarily essential for CFO reporting. CFOs, and buyers alike, will use this metric to match the monetary efficiency of firms throughout the similar business.
   Get your individual customizable copy of the Return on Fairness dashboard template right here.
7. Complete-Debt-to-Fairness Ratio – This CFO metric compares the corporate’s liabilities to its shareholder’s fairness. Equally, you possibly can consider this as evaluating how a lot you owe in your mortgage towards how a lot fairness you will have in your home. Chief Monetary Officers take note of this metric as it may be used to point when an organization has over-extended itself. Giant quantities of debt throughout growth is regular, however ought to an financial downturn happen, this might end in chapter.
   Get your individual customizable copy of the Debt to Fairness Ratio dashboard template right here.
8. Accounts Payable Turnover – This monetary metric is commonly utilized by the CFO as a number one indicator of an organization’s monetary well-being. This CFO dashboard metric measures the period of time it takes an organization to pay its suppliers. A reducing ratio (that means the time to pay is getting longer) is likely one of the first indicators of money circulate points. An rising ratio, however, can point out that an organization’s useful resource allocation is inefficient, and that they might be utilizing the cash for one thing higher.
   Get your individual customizable copy of the AP Turnover Mannequin dashboard template right here.
9. Money Conversion Cycle (CCC) – Most CFOs just like the keep watch over the money conversion cycle efficiency metric because it measures the variety of days it takes to transform items again to money. That is extraordinarily essential in the case of money circulate evaluation and stock administration. This metric is definitely comprised of three different monetary metrics. As such, this can be very information heavy and greatest tracked utilizing monetary KPI software program. CCC = Days of Stock Excellent + Days Gross sales Excellent – Days Payables Excellent
10. Gross Revenue Margin – This CFO metric must be one of many key highlights on any C-level monetary dashboard. The gross revenue margin KPI is used to evaluate the monetary well being of an organization by inspecting its gross sales. To do that, it removes the price of items offered (COGS) from the income, and expresses this as a proportion of income. This successfully determines how worthwhile an organization is. A largely fluctuating gross revenue margin can usually be seen as an indication of poor administration.
11. Earnings Per Share (EPS) – In relation to KPIs, nothing says reporting like EPS. This CFO reporting metric is one in all two items of knowledge each investor desires to know. (The opposite essential determine being income). This metric actually appeals to buyers because it tells them how a lot cash every of their shares is making. It’s also a elementary metric that can be utilized to match firms no matter business. EPS = (Web Revenue – Most popular Dividends)/(Finish-of-Interval Widespread Shares Excellent)
12. Compound Common Progress Fee (CAGR) – The compound common development price CFO metric is particularly essential in the case of quarterly experiences. All buyers need to see firm development, whether or not or not it’s income or EPS. This efficiency metric calculates how a lot compound development (optimistic or unfavorable) the corporate has achieved over a particular interval. To additional reiterate the significance of those development figures, they’re usually displayed entrance and heart on CFO dashboard software program. CAGR = ((Ending Stability)/(Starting Stability))^(1/n)-1The place n is the variety of years over which the expansion occurred.
13. Worker Depend – This CFO KPI tracks what number of full-time and part-time staff are on the payroll. This information is often used for 2 functions: figuring out efficiency metrics on a per worker foundation, and illustrating how labor prices are impacting monetary efficiency. CFOs will usually evaluate how monetary metrics carry out between full-time, part-time, and contract staff to see that are most price efficient.
    Get your individual customizable copy of the dashboard template right here.
14. Curiosity Protection Ratio – At insightsoftware, that is one in all our favourite CFO metrics. This metric is especially helpful as a result of it is ready to present perception into the monetary well being of an organization from two completely different views. It may be used to investigate the debt ranges of an organization in addition to the corporate’s profitability. If your organization is trying to borrow funds for capital growth, this metric must be reviewed. Lenders will usually use the curiosity protection ratio when assessing their stage of danger with a mortgage. A excessive protection ratio represents a low danger mortgage, whereas a excessive ratio might end in rejection. Curiosity Protection = EBIT/Curiosity Expense

Simply do not forget that figuring out which KPIs to make use of for a CFO dashboard is barely half the battle. The info gathering, processing, and visualization is simply as essential. With out correct software program, your finance staff and CFO would spend weeks gathering and crunching information, solely to appreciate they’re making selections based mostly on outdated data. If this hasn’t satisfied you to make use of a dashboard software program answer, now we have some pattern CFO dashboards that you may obtain and take a look at for your self.

Pattern CFO Dashboards

CFO dashboards are available a wide range of completely different flavors, relying on what you wish to give attention to. Nevertheless, all of our dashboards have one factor in frequent: they scale to the scale of what you are promoting. This helps you lower your expenses in the long term as you possibly can keep away from pricey software program migrations as what you are promoting grows. Listed below are three completely different dashboards that you may develop what you are promoting with:

Revenue and Loss Dashboard

The primary dashboard now we have focuses on revenue and loss. Don’t let the simplicity of the identify idiot you. That is under no circumstances a easy dashboard. It has been constructed upon the concept that your group is layered with a posh construction, involving hundreds of information factors throughout completely different enterprise segments. This dashboard will routinely collect all of your information and course of it, enabling simple visualization.

Monetary Ratios KPI Dashboard

Monetary ratios are the bread and butter of any CFO. These ratios are the fast checks that give perception into the monetary well being of your organization. This dashboard gives a listing of conventional monetary ratios that require your consideration, and presents them in a easy and efficient method. This dashboard is the definition of data-driven determination making. Obtain a free copy of this Excel dashboard template right here.

Grasp Monetary Dashboard for CFOs & Finance Managers

If there may be any monetary metric or KPI you need to analyze, this dashboard has it. You may pull up any monetary data you want with a pair clicks. Want monetary data for a gathering? No drawback. Need to assessment the quarterly report earlier than submitting it? Straightforward-peasy. This dashboard is an all-in-one answer.

Hopefully you discovered one thing that piqued your curiosity within the CFO dashboards supplied right here. Nevertheless, when you didn’t discover the precise dashboard you needed, be happy to take a look at all of our pattern dashboards!