Let me take you back in time when I was a kid riding a bicycle. For several years, I rode a very basic cycle that had no speedometer, sensors, etc. Even the hatchback car that I drove for over ten years had very elementary features. I thoroughly enjoyed driving it, and I found it just perfect…till last year when I bought a large SUV.

Initially, I had a misconception that driving the SUV would be a herculean task – difficult and exhausting. But I must confess that I could maneuver the SUV comfortably despite its large size & heavy structure. During my first long drive in that SUV, I gained huge driving confidence thanks to its MID (multi-information display) dashboard that had several indicators such as low tire pressure, low battery, fuel mileage, GPS maps, engine overheating, oil leakage, rear parking sensors, etc. While the ABS and Airbags made my drive safer, the rearview video camera helped me reverse my car easily even in crowded places.

The above situation can be an analogy to several entrepreneurs doing business without a monthly MIS / dashboard of their business performance. I firmly believe: business is just a vehicle for us to achieve our goals and missions in life. Driving this vehicle without a dashboard makes it very difficult to sustain & grow beyond a point.

Several business owners carry on their business for several years with the following questions hounding them throughout sleepless nights:

• Am I really making a decent profit in my business?
• If yes, where are my funds blocked?
• Why do I face problems in paying salaries, rent, EMI’s, etc?
• Even though I collect GST from my clients, why don’t I have adequate funds to deposit GST every month?
• Is there any fund leakage in my business?
• In spite of working hard for 10-15 years (or even more) in business, why I have not accumulated decent wealth in life?

The one factor that differentiates a highly successful business from an average one is “decision-making“. The kind of decisions and the speed of implementation depend totally on the quality of inputs received from these dashboards.

Just like CFO’s in large corporates, we have helped several businesses in developing these dashboards, thereby armoring them with the following inputs:
1. Topline & Bottomline trend analysis (monthly)
2. Profitability & cashflow projections
3. Liquidity position
4. Working Capital position
5. Asset turnover efficiency in business
6. Business ROI for lenders & investors
7. Networth of promoters
8. Areas where funds have got blocked in business
9. Fund leakages in business
10. Compliance score

Developing these dashboards and regularly monitoring them over a period of time nudge the business towards exponential growth, thereby accumulating huge wealth for the promoters, and also ensuring 100% compliance.

So, will you drive your business without a dashboard?

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The above article is penned by one of our finance mentors CA Vikram Menda to disseminate the best practices followed by some of the best businesses across the globe.

CA Vikram Menda handholds businesses in implementing new-age tools & techniques of financial management, thereby ensuring cash-rich businesses and timely compliances.