The Cash Flow Dashboard: 8 Metrics Every Finance Team Should Track
By Newtown Analytics · · 7 min read
For cfos & finance leaders
A cash flow dashboard is a one-page view of the numbers that tell you whether the company is safe today, will be safe next quarter and is getting better or worse. The best ones are short. Eight metrics, each with a clear definition, a target and an owner, are enough for most finance teams. This guide describes the eight, how to calculate them, how to set thresholds and how to lay out the page. It supports cash flow management and ties together the measures in liquidity ratios, burn rate and the days metrics.
Design principles
- Few metrics. Eight to ten at most. Every extra number dilutes attention.
- Forward-looking first. Include the forecast, not only history.
- Each metric has a definition, a target and an owner.
- Trends, not just levels. Show the last 6 to 12 periods.
- Color only where action is required. Use red, amber and green with agreed thresholds.
- One page, updated on a fixed schedule.
The eight metrics
1. Cash and total liquidity
Definition: Cash balance, and cash plus undrawn committed credit.
Why: It is the starting point and the base for every other measure.
Example: Cash $582,000; undrawn line $150,000; liquidity $732,000 against a target of $520,000.
2. 13-week forecast low point and cushion
Definition: The lowest projected ending cash in the next 13 weeks, and the cushion above the minimum.
Why: It shows whether trouble is coming. See the 13-week cash flow forecast.
Example: Low point of $310,000 in week 9, against a minimum of $250,000, a cushion of $60,000.
3. Net burn or operating cash flow
Definition: For companies burning cash, net burn per month (three-month average). For others, operating cash flow for the month and trailing 12 months.
Why: It shows the underlying direction of cash. See burn rate.
Example: Net burn of $75,000 on a three-month average; runway of 10.9 months at $820,000 cash. See cash runway.
4. Days sales outstanding and past-due percentage
Definition: DSO and the share of receivables beyond terms.
Why: Receivables are usually the biggest swing factor in short-term cash. See days sales outstanding and the accounts receivable aging report.
Example: DSO 41 days against a target of 36; 22 percent of receivables past due against a target of 15 percent.
5. Days inventory outstanding or weeks of cover
Definition: DIO, plus the share of inventory with more than a set number of weeks of cover.
Why: Inventory ties up the most cash for product companies. See days inventory outstanding.
Example: DIO 62 days against a target of 55; excess stock (over 52 weeks of cover) of $96,000.
6. Days payable outstanding and past-due payables
Definition: DPO compared with agreed terms, and past-due payables.
Why: It shows payment discipline and whether payables are being stretched. See days payable outstanding and the accounts payable aging report.
Example: DPO 31 days against terms of 30; past-due payables $0.
7. Cash conversion cycle
Definition: DIO + DSO - DPO.
Why: It summarizes the working capital cycle in one number. See the cash conversion cycle.
Example: 62 + 41 - 31 = 72 days, against a target of 62.
8. Forecast accuracy
Definition: Weighted absolute percentage error of the one-week-ahead forecast of receipts and payments, and the bias.
Why: A dashboard is only as good as its forecast. See how to measure and improve cash forecast accuracy.
Example: WAPE 7 percent against a target of 8 percent; bias -1.5 percent (slight over-forecast).
A sample layout
| Metric | Current | Target | Prior period | Trend | Status | Owner |
|---|---|---|---|---|---|---|
| Total liquidity | $732,000 | $520,000 | $690,000 | Up | Green | CFO |
| 13-week low-point cushion | $60,000 | $100,000 | $85,000 | Down | Amber | FP&A |
| Net burn (3-month avg) | $75,000 | $70,000 | $80,000 | Improving | Amber | CFO |
| DSO / past due % | 41 days / 22% | 36 days / 15% | 40 / 20% | Worsening | Red | Controller |
| DIO / excess stock | 62 days / $96,000 | 55 days / $60,000 | 63 / $98,000 | Flat | Amber | Supply chain |
| DPO / past-due payables | 31 days / $0 | 30 days / $0 | 31 / $0 | Flat | Green | AP lead |
| Cash conversion cycle | 72 days | 62 days | 72 | Flat | Amber | CFO |
| Forecast accuracy (WAPE) | 7% | 8% | 9% | Improving | Green | FP&A |
Add a short commentary box with the three most important points and the actions agreed. The layout above can be built in a spreadsheet, a BI tool or a finance platform. Choose a tool that your team will keep updated.
Setting thresholds
Use your history and your risk tolerance, and write down the logic.
| Metric | Green | Amber | Red |
|---|---|---|---|
| Liquidity vs. target | At or above | 90% to 100% | Below 90% |
| 13-week cushion | Above 50% of minimum | 20% to 50% | Below 20% |
| DSO vs. target | At or below | Up to 5 days above | More than 5 days above |
| Past due % | Under 15 | 15 to 25 | Over 25 |
| DIO vs. target | At or below | Up to 10% above | More than 10% above |
| DPO vs. terms | Within 2 days | 3 to 7 days over | More than 7 days over |
| WAPE | Under 8 | 8 to 12 | Over 12 |
These thresholds are examples. A shorter reaction time or higher volatility might require tighter limits.
Frequency and ownership
| Metric group | Update frequency |
|---|---|
| Cash, liquidity, forecast | Weekly (daily in a crunch) |
| DSO, DPO, past due | Weekly or monthly |
| DIO, excess stock | Monthly |
| Cash conversion cycle | Monthly |
| Forecast accuracy | Weekly |
Assign each metric to an owner who can explain changes and propose actions. Review the dashboard in a weekly cash meeting and a monthly finance review. See how to run a weekly cash review meeting.
Extras to consider
Depending on your business, you might replace or add:
- Covenant headroom for companies with loan covenants.
- Customer concentration in receivables.
- Burn multiple for growth companies. See burn rate.
- Pre-order and deposit balances for companies with prepayments.
- Cash conversion by channel for omnichannel businesses.
- Operating cash flow margin. See cash flow margin.
A monthly review script
A good dashboard meeting takes 30 minutes and follows a pattern.
- Headlines (5 minutes): is liquidity inside the target, and what is the 13-week low point?
- Reds and ambers (15 minutes): for each, the owner explains the cause, the action, the date and the expected effect on cash.
- Forecast changes (5 minutes): what changed in the forecast since last month, and why?
- Decisions (5 minutes): approvals needed, escalations and anything to communicate to lenders or the board.
Record decisions and review them at the next meeting. A dashboard that is discussed but not acted on loses value quickly.
Definition traps
Small differences in definitions make numbers incomparable over time.
- DSO: decide whether to use credit sales only, and whether to use average or ending receivables.
- Liquidity: state whether undrawn credit counts, and whether any part is restricted by the borrowing base.
- Burn: specify net or gross, and the averaging period.
- Cash conversion cycle: use the same day count for each component.
- Forecast accuracy: state the lead time and the line items included.
Write the definitions on the dashboard itself, so that new readers use them correctly.
Keeping the dashboard useful
- Automate the data where possible, but check it. A dashboard with wrong data is worse than none.
- Document definitions so that numbers do not change quietly.
- Prune metrics no one acts on.
- Link each red to an action with an owner and date.
- Show trends over time and annotate unusual events.
- Review the dashboard itself twice a year.
For product companies
Add the connection to supply and demand. Show inventory cover relative to forecast demand, open purchase orders with payment dates and forecast bias on sales. These link the dashboard to operations, where much of the cash is determined. See demand planning and inventory optimization.
Related guides
To define the cash level that the dashboard measures against, see how much cash reserve should a business hold?. For the ratios behind the liquidity measures, see liquidity ratios.
FAQs
What should a cash flow dashboard include?
Cash and liquidity, the 13-week forecast low point, burn or operating cash flow, receivables, inventory, payables, the cash conversion cycle and forecast accuracy.
How often should it be updated?
Cash and forecast measures weekly, others monthly. Update more often when cash is tight.
Which tool should I use to build it?
Any tool that your team will keep current. Many start in a spreadsheet and move to BI or finance platforms as needs grow.
How many metrics are too many?
More than about ten tends to dilute attention. Keep only metrics that someone acts on.
Who should review it?
The finance lead and owner or CFO weekly, with a monthly review that includes operations and sales leaders.
Keep reading
- Complete guide: Cash Flow Management: The Complete Guide for Growing Businesses
- How Much Cash Reserve Should a Business Hold?
- Liquidity Ratios: Current, Quick, and Cash Ratio Explained
- Burn Rate: Gross vs. Net, and How to Calculate It
- Related topic: Demand Planning and Inventory Optimization: The Complete Guide
This article is for general information. It is not accounting, tax, legal or investment advice, and examples use illustrative numbers rather than client data. Confirm decisions that carry financial or legal consequences with a qualified professional.