Step 8: Turning data into information -- give operational meaning to financial statement data

Step 8 begins giving operational meaning to financial statement data by presenting the statements color-coded in a matrix. By entering the financial statement data from standard accounting packages into the Scoreboard, it can then be converted easily into the three bottom lines and 12 drivers. These crucial numbers provide a coherent summary of the big picture results the organization is achieving.

In the Financial Scoreboard, there are 13 periods that are set up in the same way. The ending balance sheet of the previous period becomes the beginning balance sheet of the next period. Each time a new income statement and balance sheet are entered, a “strategy screen” is automatically populated with the direct and indirect cash statements, the three bottom lines and the 12 drivers. Also populated automatically is a trend table that shows that data for every period, so one can immediately track results in any of these 15 crucial dimensions.

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This process can also be continued with projected statements, allowing for these dimensions to be explored as future results. When the assumptions are solid enough to be well defended, bankers will, in some instances, begin talking terms because they see that the analysis they would normally have to do is already done. They love that level of preparation.

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