It should go without saying: Your financials are an important indicator of how your business is performing. But more than a record of where you've been, these reports should be used as a compass for where you'd like to go. At a glance, the numbers and figures in cells, down columns and across rows tell the financial story at the heart of your business and contain actionable insights for everyone you employ. To be clear, your financial reporting has useful information for every person on your team, so why aren't you sharing it?
A step further, at my accounting firm, Nth Degree CPAs, we advocate for creating and then sharing more than just financial reports. We look for reporting that covers performance for employees, culture and operations. Taken on the whole, this collection gives a clear picture of how the business is performing.
Like goals, reports don't do anyone any good hidden on your computer. They need to be shared across your organization, in and out of every department, from your senior staff to your newest hire. Why? Knowledge is power, and a powerful business has powerful people. With reporting in hand, management can make better decisions, rank and file can see how their efforts impact the bottom line and everyone can feel the empowerment that comes from being a trusted part of the team.
Analysis isn't for everyone, and the more your team supports the effort the better, so consider distilling your reports into something a little more digestible, while still preserving transparency with key information. Tailoring a report for individual teams or departments will ground the numbers and make them relevant for the audience. Showing them how their department impacts the numbers can have a lasting impact on performance. More than a historical account of where your company has been, if used effectively, reporting can serve as a map for how to reach a goal and assess performance of specific efforts.
Committing to widespread reporting communication and education can be daunting, tax your resources and make you feel uncomfortable, but for the boots on the ground, knowing what's going on can result in lasting improvements to efficiency, decision-making, focus and, ultimately, growth. The numbers tell a story — by understanding its beats, rhythms and message, you can get everyone excited about staring at spreadsheets and marching ahead.
- Clean up your financial reports — aim for clarity.
- Consider expanding your data collection to create reports on culture and operations.
- Now boil 'em down, root out the important stories and share across the organization.
- Unify teams across departments with increased transparency.
- Watch goals get attacked with new sophistication and vigor.
For more insights by Dan Nicholson, check out his contributor page.
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