Like any finance professional, as you read this article you probably are very busy either doing your year end audit or preparing requested management reports.
As you may also be aware of, the relevance and usefulness of these management reports are only as good as the effort exerted in preparing them.
The problem has always been that some finance departments just produce reports that simply crunch numbers without clear and actionable insights in them. This begs the question, what are you creating this report for? Is it even worth anyone´s time?
To help you create management reports that aid in decision-making, here are 5 questions you should ask.
- What is the purpose of this report?
- How many KPIs are there in this one?
- Do I have a good story here?
- Does this report look overwhelming to a reader?
- How do I currently do it and with what tool?
– To make your management reports effective, it must fulfill its purpose and it must be tailored to the needs of the person requesting it. Other good questions to ask are key business drivers and how success is measured. By doing this, you know for a fact that someone will have good use for the reports and that these reports will answer critical business questions.
– Some have this habit of presenting a huge number of KPIs in their reports. The old belief is that the more you track a wide variety of KPIs, the more questions you can answer. However, tracking a lot of KPIs can lead to analysis paralysis. We are after all human beings and there is a limit to how much information we can process effectively.
It is more important to just present a maximum of 6 KPIs, the ones that are critical as it will be a lot easier to ask the right questions.
– Reports are not useful when they are not clearly understood. Make sure that your reports have a good beginning, middle, and end of a story so that your readers follow a certain flow. This way it is easier to follow the points your report is trying to arrive at.
Use trends you identified, point out patterns, and use contrast of figures when applicable as it adds an extra layer of impact to the readers.
– Step away, get some fresh air, and then look at your reports with a fresh mind. At first glance, does it look overwhelming? Is there too much information that it is hard to know where to focus?
Remember not to take for granted visual beauty because it helps get your message across to your report consumers. Use appropriate color coding, easy to understand dashboards, and make sure the insights are easily understood.
– Look and evaluate carefully how you create financial and management reports today. Do you think it can be improved? If so, in what way?
Then look at add-on technology like Epicor Financial Planner and evaluate whether tools like EFP can help you create your reports faster, present your insights clearer, and present it in a more visually pleasing manner.
Now after year end reports and audits are done, it is a good time to look at how you have done things last fiscal year and how you can improve it so you have room for creativity and critical thinking this year.
You can even try out EFP for free for 30 days, so you can properly evaluate it. Visit www.dsp.se or email firstname.lastname@example.org to see an online demo of this product.