Dashboard Reports Rotation

Only ten minutes into my call with the board’s treasurer and we had already brought up six different financial reports we could prepare and present at the next board meeting.  Each presented the organization’s achievements and shortfalls from a different perspective, and all presented information important for the board’s awareness and discussion.  But honestly, six reports, in addition to the regular financial statements presented at each meeting is, in my opinion, number saturation.  Particularly because many board members do not enjoy hearing about metrics, financial results, and other numerical values.

In my previous article “4 Fiscally-Responsible Changes You Can Make as a Board Treasurer,” I proposed that at each board meeting the treasurer should present a full set of financial statements and no more than two dashboard reports.  In this article, I propose that the organization prepare five different dashboards and a treasurer’s three-point report and rotate the dashboards at each meeting.  Here are the dashboard reports I have recently recommended to my clients:

  1. Financial Position Metrics – Compare the current statement of financial position’s major categories to the same time last year, and analyze the differences.  In addition, select three to four  key performance indicators (such as Days Cash on Hand) and identify whether the organization is over or underperforming under those metrics.
  2. Cash and Net Assets Position – Cash is king, and it is triple crowned for many nonprofits who have not been able to secure a commercial line of credit.  Use this dashboard to analyze the current cash on hand, current payables and receivables, and daily burn rate.  The result should indicate the number of days that the organization can operate without new cash funding.  This dashboard must be paired with an analysis of net assets and its restrictions.
  3. Budget to Actual Analysis – This is a staple of most reports since it delves deeper into the performance of the organization and where its challenges may be.
  4. Strategic Plan Compliance – This report takes apart the measurable objectives in your current strategic plan and measures compliance with those objectives.
  5. Corporate Compliance – This report updates the board with respect to various legal responsibilities: public support test, charitable registration in states, registration to conduct business in states, etc…

After much conversation, the treasurer agreed to the following dashboard rotation:

  First Quarter Second Quarter Third Quarter Fourth Quarter
Report As of 12-31 As of 3-31 As of 6-30 As of 9-30
Treasurer’s 3-Point Report X X X X
Financial Position Comparison X   X  
Financial Position Metrics X      
Cash and Net Assets Position       X
Budget to Actual   X   X
Strategic Plan Compliance   X    
Corporate Compliance     X  

 

While creating this schedule, we had to consider other reports presented at the board meetings so that the treasurer’s dashboards could support the information presented from these other reports.

I would love to hear your experience.  How many boards do you know that do something similar?


Maribel Torres, CPA is CEO and Director of Client Accounting Services at Lumix CPAs and Advisors. She is a member of the Advisory Board for CPA.com and the AICPA Digital CPA Conference.  She also serves as a peer reviewer for the Maryland Association of Nonprofits Standards for Excellence Institute®. Follow Lumix on TwitterFacebook, and LinkedIn for the latest insights, news, and updates in accounting and advisory services.