Have you ever forgotten the “Why” of Financial Reporting and Analysis? As you sit at your desk and create this month’s financial reports for your clients, you may ask yourself, “Why am I doing this? Is this helping my clients at all? “It is essential always to keep the why of your work in mind. It is common to lose focus and forget why we are doing the work we are doing. Let’s put a stop to that right now. Financial Reporting is not just busy work. It is crucial information that your clients need to have and need to understand. It should be the first source of information when it comes time to make business decisions. Here at Reach Reporting, we believe there are lots and lots of reasons to create financial reports. We took a vote and decided these are our favorite four reasons why Financial Reporting is critical to your clients and the success of their business.
Relay Vital Information.
Think of this as the meat and potatoes of the meal, the rib-sticking, fill-your-belly type stuff. This data is what they HAVE to know to make the best financial decisions for their company. You must create something as straightforward as possible when something is considered critical knowledge. You wouldn’t want your doctor stuttering and dancing around a life-changing diagnosis, would you? Or using medical jargon that means nothing to you! So do the same for your clients. Be clear, be concise, and get to the point. Make it as easy as possible to understand.
Educate your Clients.
“Now you know. And knowing is half the battle….” G.I. Joe
G.I. Joe was indeed on to something back in the ’80s. When your clients KNOW what is happening, good or bad, they are armed and ready to make proper financial decisions. Educating your clients is the next step after relaying vital information. We say it all the time here at Reach Reporting, but you must remember your clients are NOT accountants or financial advisors; that is why they hired you. You will start a fantastic chain reaction by teaching your clients how to read a financial report and translate the data into action. Their confidence will soar along with their appreciation of the service you provide for them. When your clients begin to catch the vision, everything changes.
Watch for Trends.
This is often also called financial forecasting. Whatever you choose to call it, it is a critical puzzle piece of business financial planning. It combines past financial performance and current conditions to predict possible future scenarios. Trends can be either positive or negative, but either way, being able to predict their arrival is a critical component of being a trustworthy financial advisor. When you can watch the trends, you can see the direction of your clients’ roads and advise accordingly. Financial forecasting is never guaranteed, but it’s critical for informed decision-making. Regardless of your client’s industry or how long they have been in business, maintaining a forward-thinking mindset and learning from past patterns is a surefire way to plan for the future.
Translate Data to Knowledge.
This combines all three prior reasons why financial reporting is more than just busy work. If you have heard of the Knowledge Pyramid, it applies perfectly to financial reporting. Raw data is full of valuable information. Unfortunately, raw data is also challenging to understand. One of your most important jobs is to help turn that raw data into something more digestible. When you translate your clients’ raw financial data into information and then knowledge, you have given them what they need to create wisdom.
Final Thoughts.
These four areas must be the main focus when creating your financial reports. Once remembering the why of your work becomes more manageable, doing it becomes less of a chore and more of a joy. Reach Reporting was created to help you stay focused on the key elements. We take the less-than-exciting parts out of Financial Reporting and leave the good stuff to you.