Dig Here

Follow this video to understand and utilize the Dig Here widget on the main page of CFO Scoreboard:

Dig Here

Imagine a Treasure Map. Candidly, it is worthless unless there is a bright red “X” on the map. Knowing exactly where to dig is critical to finding the buried treasure. The Dig Here tool in CFO Scoreboard provides a list of the most urgent actions you should take to improve your business today. If you don’t do anything else, work on the items on this list and your business will make more money and generate more cash.

The Dig Here list can contain two types of actions.

The first is controlling expenses. We have identified the individual expenses that have changed the most since the previous (or comparison) time period - the ones that have the largest impact on your profits and cash flow, and we show you how much money you would save if you had performed as well as you did previously. If you are viewing the reports for the current month, the comparison is to the previous month. If you are viewing the report for the current year to date, the comparison is to the same time period the previous year.

We have analyzed the expenses of your business based on a technique called Common Sizing”. Common Sizing is simply expressing an expense amount as a percentage of your revenue. So, if an expense was 5% of your revenue last month, but it’s 8% of your revenue this month, that extra 3% is the savings we are talking about in the Dig Here function. To learn more about how we calculate your potential savings, click the expense item, and a small dialog box will appear. In this example, you can see that in November, the company spent $4,350 in advertising when the revenue was $87,000. That’s a common size of 5%. In December, revenues increased to $123,000 and the company spent $9,840 on advertising. You might expect some expenses to increase along with revenue, but in this case, the advertising expense increased from 5% of revenue to 8% of revenue. If the company had been able to control this expense and keep it to only 5% of revenue as they had in November, they would only have spent $6,150… And the company would have saved $3,690 in expenses…. Which would have been an extra $3,690 of bottom line profits.

The second type of Dig Here action is managing the balance sheet’s cash flow levers. These are accounts on your balance sheet where operating cash can hide. If you buy too much inventory, that cash you spent hides on your balance sheet as excess inventory asset. If your customers pay you too slowly, the cash they should have paid you hides on your balance sheet as excess accounts receivables. And if you pay your vendors too quickly, you trade cash in the bank for a smaller accounts payable amount on your balance sheet.

CFO Scoreboard analyzes your balance sheet by comparing the current time period to the previous time period.  Based on this comparison, we determine if you have bought too much inventory, paid your suppliers too quickly, or are being paid too slowly by your customers. We show in the savings column how much operating cash your balance sheet consumed because Accounts Receivable, Inventory or Accounts Payable were not managed as well in the current time period as they were in the past… and how much incremental cash you could have had. Again, you can click on an item to learn more about how these savings are calculated. 

Still need help? Contact Us Contact Us