Make the Monthly Reports Worth Reading
Many management reports are not management tools; they are merely memorandums of information. As management tools, management reports should encourage timely action in the right direction, by reporting on those activities the board, management, and the staff need to focus on. The old adage “what gets measured gets done” still holds true.
This chapter is an extract from a white paper1 I deliver around the world that has revolutionized how many finance teams report. Due to space constraints, I have highlighted the main issues. For further information, it may be worth accessing this white paper.
Foundation Stones on Month-End Reporting
What is good monthly reporting? A good month-end finance report should:
- Be completed quickly—following the rules set out in Chapter 2.
- Be consistent—between months, judgment calls, format.
- Be a true and fair view and error free.
- Be concise—less than nine pages.
- Have a separate reporting line only if category is over 20 percent of total revenue or expenditure, whichever is relevant; thus the report will have only 10 to 15 lines.
- Have an icon system to highlight major variances.
- Do away with the essay in front of the financial statements; merely merge numbers, graphs, and comments on the one page.
- Have graphs that say something—a title that describes the main issue, and following the rules set by Stephen Few,2 an expert on data visualization.
- Avoid reporting unnecessary detail, such as Sales of $23,456,327—surely ...