When you think about financial KPI management the simplest approach is often the best. To this end we recommend financial performance be measured through the use of budgets on accounts. To support this, be sure to have the creation and import of budgets as one of your task items during go-live. If you are already up and running and don't yet have budgets established, you can hand key them, but importing is much simpler. Speak with your Project Manager or support to assist you with this task. Once established, budgets are fairly easy to maintain, getting them started is another question. You may find it easier to create budgets on your "Roll Up" accounts. This works perfectly well. You don't necessary have to key all of your specific operating cost, simply key your total budget for operating cost on the Parent account. This said, it's your business, set budgets to EVERY account if you wish.
Budgets are accessed by opening the GL Account your wish to key the budget values for and choosing Budget tab at the top of the screen. Then enter your amounts for each period. You can enter your annual amount and select the "Distribute Selected Amount Evenly" option if desired. You can also Copy one years budget to the Next year by clicking the Copy option.
Once created, we recommend that you get in the habit of using the "Income Statement 12 Month Extended" as your go to document form reviewing financial KPI's. Run your statements with whatever Departmental inclusions or exclusions you'd like for distribution to your local managers. The report supports the ability of showing Actual data for your completed periods, then uses your budget information for the remaining months in your fiscal period.
Year end values show you performance relative to "plan". Learn to read the statement understanding what drives each value. Teach departmental leaders to read their statements, produce budgets and then base performance reviews on adherence to plan.
The second tool we recommend clients employ is the use of the "Account Trends" report option. (Located under Financial Reports) This tool allows you to select up to five accounts, of any account type and chart their performance on a graph. The charting feature supports the inclusion of roll up accounts so you can easily include totals in the graphing process.
Examples of charting exercises you may find useful would be charting total CASH, AR, and INVENTORY. When your cash is dwindling, your AR is hopefully swelling as may be your Inventory. If AR is swelling, push collections. If inventory is swelling, view open orders to confirm it's for good cause, otherwise you may want to speak with purchasing!
