Dashboards vs. Scorecards: Tracking Financial Success

Financial planning is all about setting clear-cut goals, developing strategies to meet those goals, and tracking progress to ensure those objectives are met. While many strategies and tools to track this progress exist, dashboards and scorecards are often used to visualize growth and analyze factors “at a glance,” making it easier to see where financial development is growing or lacking.

Often both dashboards and scorecards both display how individual key performance indicators (KPIs) are performing. For example, sales, profits, time frames, etc. However, dashboards and scorecards present this information in different ways:

Dashboards

Dashboard reporting is often highly visual and utilizes graphs, charts, color-coded data, maps, etc. They typically display trends in clear-cut terms so that a viewer can easily and quickly see where upward or downward trends exist. Dashboard reporting is typically used for short-term goals or operations so that a viewer can see the current state of business in real time, such as how a product is performing on any given day.

Scorecards

Alternatively, scorecards are used to track progress more so than current performance. In other words, while dashboard reporting focuses on real time performance, scorecard reporting tracks progress in terms of larger goals. The former focuses on monitoring while the latter focuses on overall management of affairs. Because scorecard reporting focuses on more long-term outcomes, performance is typically tracked periodically rather than instantly, such as monthly as opposed to daily.

Examples

To better understand dashboard reporting versus scorecard reporting, it’s easiest to use the example of a sales company. To track and monitor overall progress, a sales company might utilize both dashboard and scorecard reporting simultaneously:

Dashboard reporting might involve tracking daily sales within different regions or countries. Bar graphs or pie charts might be created and updated continuously to see which location reaps the highest profits per day.

Scorecard reporting might involve tracking the sales of one store in one location over an entire fiscal year, monitoring monthly whether profits are hitting targets or not. Actual sales versus target sales might be represented with bar graphs at the end of the year to determine how often quotas were or were not met.

Pros & Cons

Many companies utilize both types of reporting in tandem, though with different objectives. Dashboards will help a viewer monitor, in real time, how the business is performing. More infrequently, scorecards will be balanced to see how the business is performing overall in terms of goals, and a viewer can then make educated decisions about what adjustments may be necessary to better meet those targets. Using just dashboard reporting might provide an inaccurate view of how a business is running long term, while just using scorecard reporting might cause a manager to miss smaller changes or factors that rise and fall.