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As a CFO for nonprofit organizations, I have prepared and presented countless financial reports to board members and executive leadership teams over the years. I make sure the balance sheet balances and the income statement reflects the activity of the organization. I double and triple check all the numbers to assure an accurate report is presented. I even write out a script and practice it to make sure the most important items are covered.
For years, I was armed and prepared with great data to help the leaders of the organization make well-informed decisions. I knew the data and the reports were accurate. But, one day I realized my reports did not have the impact expected. While presenting reports, I always got the same blank looks on people’s faces, they rarely asked questions, and they sifted through my reports like they were looking for something specific but weren’t able to find it. Even though I was prepared and the reports contained large amounts of valuable information, I was not making a connection. They were not hearing me. The reports did not make sense to them.
I was telling a story that no one understood.
If you think about it, accountants are a lot like newspaper reporters. We take a lot of facts (invoices, payroll, deposits, etc.) that happened in the past and put them in a report that people read. If we do it right, people come away informed. If we do it well, people come away informed and they enjoy reading the report. The best newspaper reporters tell stories with the facts.
As accountants, we need to make sure our reports are telling a good story. How do we do that with balance sheets and income statements? We are not writers or reporters. Most of us work with numbers all day. We are not experts in grammar or storytelling.
Accountants tell stories by turning their balance sheets and income statements into charts and graphs. Many times, we compare balance sheet numbers to last year’s balances and we compare income and expenses to budgets. Instead of just sharing the numbers, we can show the organization’s cash balance as a line graph that shows the trend in cash over the past 12 months…and we can project the cash balance for the next 3 months. We can show expenses on a pie chart grouped by program, management & general, and fundraising. The readers of the reports can instantly see exactly where the organization has been and where it is going without having to do math in their heads.
When used with the numbers, charts and graphs give more depth and understanding of the financial condition of the organization. When I finally started using charts and graphs with my presentations, I received much better questions and feedback. The looks on people’s faces were more engaging. They were not flipping through the report as much. They were involved…which is what we want.
Board members and executive staff have a fiduciary duty to the organization. They need to know the financial condition of the organization. Mixing charts, graphs, and numbers together paint a complete picture and give them this ability. They can see a current condition and how it is trending.
At WF Accountants we work with our clients to provide customized financial reporting. We do more than just give them a balance sheet and income statement. We work with our clients to produce monthly reports that the board and management can understand.
Let us know if you need accurate financial reports that you can understand. We would love to give you a customized solution.
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