WikiCFO defines a flash report as “a periodic snapshot of key financial and operational data.” It’s another name for a financial dashboard. As a Contract CFO I teach my clients that a flash report measuring the right metrics is essential to a successful business.
How to Create a Flash Report
Often business owners and CEOs agonize over what to include in the flash report. It’s quite simple…the answers to the questions you ask over and over. Those answers are what determines what the correct key metrics are for you.
All flash reports should update you on:
- Liquidity:
- How much cash you have on hand.
- What you owe to vendors.
- Productiviy:
- How many widgets your plant has produced.
- How many hours your employees have worked that are billable.
- Profitability:
- Which products are selling and the gross profit they earn.
- Which employees are working efficiently (i.e. are they doing the work within budget hours or less) and at what billable rate.
All business owners have certain financial or operating data that is meaningful to them and them alone. It’s fine to include these metrics. Just make sure the overall flash report is useful to many.
Purpose & Frequency of Reviewing Flash Reports
Flash reports are the early warning indicators of a business. They tell you what’s working, what’s going better than expected and what you need to look at pronto! To be meaningful it is necessary to review several weeks in a row and look for developing trends.
It’s just as important to understand why operating performance is better than expected as to understand why it’s worse than expected. You can’t repeat the positive if you don’t understand why it happened.
While I recommend weekly flash reports, if certain metrics are only meaningful monthly then make the report for the last week of the month an expanded version.
All the CEOs I have supported gave me the information I needed to assemble the appropriate flash report within a week of our working together. Is your accounting staff listening to your questions?
As an advisory board consultant and facilitator I see companies and CEOs all the time who would benefit from having an advisory board. Often the CEO is hesitant because the financial records aren’t perfect, there is no sales or marketing plan, the marketing campaign is faltering or some other reason. About the only acceptable reasons not to start are either the CEO can’t accept constructive criticism or the company simply isn’t ready.
So how do you know when it’s time? Consider the twelve questions:
- Is there is insufficient depth to the senior management team?
- Do you meet with your attorney and accountant only on an as needed basis but need broader advice?
- Do you often ask friends and family for advice?
- Does the vision for the company call for rapid growth but you don’t have a strategy developed or a tactical plan?
- Has the company outgrown the existing infrastructure and you aren’t sure where and how to proceed?
- Does the company’s growth depend on expanding the roles of various functional areas but the cash flow won’t support hiring full-time staff?
- Do you belong to a CEO forum group but need the focus to be more on your company?
- Are you thinking of bringing family into the business and don’t want to upset loyal employees?
- Do you need to develop an exit strategy and/or succession plan?
- Do the senior managers need guidance and assistance but the company can’t afford consulting fees?
- Are you thinking of forming a legal board of directors?
- Do you sit on an advisory board and see how much value it brings to that company and the management team?
If you answer yes to 9 or more, then you are ready to start forming an advisory board. 8 or less yes answers and you are either still in the considering stage or it’s not time yet.
Want to know more about establishing an advisory board? Check out the Advisory Board Kit.
I love color. So when I discovered an Inc. article recently about how CEOs were determining their personality by taking a 60 second color personality test I was intrigued. Want to know more, visit Careerbuilder.com and take the Color Career Counselor.
