What Financial Scoreboard does and

why you need it to be successful

Financial Scoreboard™ software reveals the common sense in the numbers by providing a coherent format very few people know about for integrating all of the standard financial statement fragments (the income statement, cash statement and balance sheet data, etc.) into unified pictures which show the relationships among them, both visually and mathematically, thus enabling you more rapid and rigorous command of cashflow and of your business's success.

“What is the difference between the Financial Scoreboard™ and the Financial Dashboard™?”

The Financial Scoreboard is an Excel template that uses the entire balance sheet and income statement as inputs, and color-codes that data in order to be able to quickly analyze the accuracy and meaning of it in a simple and straight forward manner. The Financial Dashboard is a web-based Flash application that takes four numbers from the financial statement so that your organization can see those four numbers as a very powerful set of ratios (shown as a “speedometer, tachometer and fuel gauge”).

“Is the information in The Financial Scoreboard™ software what is really needed to manage a business financially?”

Absolutely. It covers all the balance sheet, income statement, and cash flow statement dollars, highly summarized and easy to follow. It also covers all the resulting ratios that are relevant for owners and managers. The dollars and the ratios are arranged logically so that it is easy to trace any financial weakness. All this requires only three sheets or screens, so that the financial analysis happens quickly.

“Is this the kind of information that normally comes from accounting software and annual reports?”

No way. Standard financial-statement information is done in financial fragments. The balance sheet appears on one page, and sometimes this balance sheet only shows one column. The income statement appears on a different page; the cash flow statement appears on a third page. Although these separate pages are valuable as is, it is not easy for a non-financial decision-maker to understand how they fit together. This difficulty is a major reason that many dec ision-makers get more value from the income statement and unfortunately get little value from the balance sheet or the cash flow statement.

“Is the traditionally available information from accounting software or from annual reports enough?”

No, traditional accounting information is more like a work in process than like finished goods. For instance, it doesn’t include many of the necessary financial ratios. However, whenever any business experiences volatile sales volume, a decision-maker doesn’t know how well costs, expenses, and profits are being managed by only watching dollars.

“So how can you get from a work in process to finished goods?”

We use The Financial Scoreboard™ software template — this is the missing link!

“How do the financial statements in The Financial Scoreboard differ from those I get from my CPA?”

With The Financial Scoreboard, all the financial statement information is linked, and in multiple ways. Balance-sheet information is linked vertically, as is income-statement information and cashflow information, all of which is traditional. (Sales are linked to net profit. Collections are linked to cash change and to operating cashflow. Accounts receivable are linked to total assets.) Accounts-receivable information is also linked horizontally: beginning accounts receivable plus sales minus collections = ending accounts receivable. And every other balance-sheet line item is linked horizontally, all of which is rarely seen! The dollars are also linked to ratios, for instance to Accounts Receivable Days and Inventory Days. Accountants see The Financial Scoreboard as showing total double entry; business people see The Financial Scoreboard as showing cause and effect (when they need more profit they can focus on the income statement; when they need more cashflow they can focus on the cash flow statement).

“How does The Financial Scoreboard create more understanding and more trust in the numbers?”

It’s difficult to hide restated financial statements without footnoting, because the vertical and horizontal math always check out as described, or a balance sheet transfer is clearly shown. Any user seeing a balance-sheet transfer should insist on a complete understanding behind the amount. Balance-sheet transfers might be totally justified; perhaps accounts receivable increased as a result of buying another business. Or balance sheet-transfers may attempt to cover up fraud; perhaps accounts-receivable collections were stolen by an employee who then wants to reduce accounts receivable on the company’s books with an offsetting direct reduction to retained earnings. A quick Financial Scoreboard review and question would uncover this fraud.

“Why wouldn’t any business yearn for Financial Scoreboard understanding?”