Building a Financial Reporting Rhythm

Do your financial reports have too much going on?

All of the information is there, but picking out what matters is near impossible.

What does the reporting that you send to your clients look like?

It’s clear, simple and actionable. It shows them ROI, handpicked performance metrics and how that relates to targets. I also know there is A LOT of information that doesn’t make it onto this reporting.

Why not?

Because you know that it will distract from what really matters. Your financial reporting shouldn’t be any different.

Building a Rhythm

First you need to form a rhythm.

When I form a reporting rhythm with an agency, we establish the What, When and Why.

  • What reports to look at
  • When to look at them
  • and Why you should be looking at them

We select the data that’s important to making decisions and set a frequency to review it.

The report is built with a focus to simplify without cutting the “need to know” data. Then we pick a date and stick to it.

Building the Reporting

I like to ask is it “gotta have it” or just “nice to know”? You want to get to a place where everything on your reporting is “gotta have it”.

I call this your essential reporting.

To get down to essential reporting, you need to “kill it, merge it or own it”
  • If it’s just “nice to know”, Kill it and remove it from the reporting.
  • If you “gotta have it”, but it relates to another metric, Merge it into the related metric.
  • If you “gotta have it”, you need to Own it, regularly reviewing and making decisions off of it.
Essential reporting should be 10 lines of data or less. If there is something you don’t get, remove it from the report.

Build your reporting for the most exhausted version of yourself.

After a long day, your reports should be simple to consume and understand.

Publishing the Report

I hear all the time:
“the numbers are in QuickBooks, why do I need reporting?”
Which brings me back to the reporting you prepare for your clients. Do you tell them that the numbers are in the system and they can run reports anytime they want? Of course not. You create a dedicated time to prepare and discuss performance (a recurring rhythm).

My advice is to stop treating your financials as if they are your worst client.

You need to publish important information into reports and review it.
  • The frequency you review a report should be inversely tied to the amount of data on the report.
  • If you look at a report every day, it should have very little on it.
  • For an annual report, it can be longer.

Common Reporting Rhythms

WhatCash Balance & Deposit Report
When: A daily email and consumed under a minute.
Why: Provide high level management, who’s recently paid and if there are any big shifts in cash.
You will be surprised how powerful receiving a daily cash balance & deposit email is.
WhatP&L plus Forecast Report
When: A monthly meeting on the 5th and consumed in less than an hour.
Why: Review what has happened (past performance) and what will happen (forecast) against targets.
Time is of the essence. A P&L on the 5th is going to be of more importance than one on the 25th. If your reports aren’t ready by at least the 10th every month, you need a new system. 

Key Takeaways:

  1. Quality > Quantity – make sure you are getting the right data at the right time.
  2. Keep it simple – try to only be reviewing 10 lines of data or less.
  3. Cut and cut often – if a metric doesn’t resinate with you, remove it.
  4. Publish your reporting – numbers in your accounting system is not enough.
  5. Pick a day and stick to it – build a reporting rhythm you can rely on.
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