Presenting financial information

We bring you a guide to presenting that all-important financial information in a way that is friendly to non-accountants

It is fair to say that most, if not all, businesses know how crucial financial information can be for evaluating business success. But even with that fact in mind, a great percentage of  non-accountants are still unable to interpret financial reports and use that information to enhance their company’s profitability.

While on one hand that fact may seem worrying, on the other, it does present accountants with an excellent opportunity to provide a value-added service for their organisations and clients by shifting from not only taking up a technical role, but also gravitating towards an ‘interpreter’ position.

The challenge and opportunity for trainees and accountants is to learn how to make the numbers come alive for those who don’t easily know how to interpret the figures and help them accept and embrace the numbers as a vital step on the path to achieving the ultimate aims of the organisation.

KNOW THE BUSINESS

There are a number of reasons why it can be difficult for non-financial staff to pay attention to the numbers. For starters, individuals may be intimidated by financial data. In that regard, finance is similar to technology, in that it is an area where people may be afraid – but also with technology, they may feel entitled to actually exempt themselves from learning about it.

Whether caused by a lifelong maths phobia, or an adverse reaction to spreadsheets, it is also not uncommon to find people who are actually intimidated by the idea of having to deal with numbers. They are not for everyone.

Indeed, it doesn’t help that some organisational cultures do not embrace financial information in general. But interest in financial information should come from the top, beginning with the non-financial senior management, in order for the rest of the staff to buy in.

To be an effective presenter, you will have to consider these aspects and then you will need to grasp a sound understanding of the organisation’s business. That means the customer’s needs and preferences, positioning in the marketplace, advertising philosophy, channels of distribution, competitive strengths and weaknesses, and so on. Such information is absolutely essential in determining which financial data each area of responsibility requires.

MINIMISE THE JARGON

The format and design of any financial report are also vital to the non-accountant’s understanding. Many companies use one set of traditional financial reports for both external and internal reporting. Those reports generally better serve the needs of external users, however. Management reports are far more useful when customised to the internal user’s needs and responsibilities.

When designing management reports, consider the organisation’s most meaningful measures, which often indicate the performance level of key activity drivers.

The reports need to be specific and attainable. Examples include profit per mortgage risk level, profit per customer visit and average time to service a customer. It is important for each department to understand how its performance impacts the organisation.

Always remember to keep jargon to a minimum. Financial statements include many terms that are reasonably clear and straightforward, including cash, debtors, and creditors. However, financial statements also use words like retained earnings, accumulated depreciation, accelerated depreciation, accrued expenses, reserve, allowance, accrual basis, and current assets.

This type of jargon in accounting is perhaps too common: it’s everywhere you look. If you have any doubt about a non-professional understanding a term, simply change it into plain language.

It is also worth noting that an enthusiastic presenter generally gets the best results. Ensure you make eye contact, vary the tone of your voice, adopt appropriate facial expressions and vary the speed of the presentation. A monotone voice is usually the single greatest turnoff to an audience.

Consider visual aids to help. Approximately 85% of the information stored in our brains is received visually. Retention from oral presentations is just 10%, but that jumps to 50% when there is a combination of speech and visual aids.

Using colours to show different graphical elements of financial information is also a good way to show or highlight comparative information. Just remind yourself, that too many colours can be just as confusing as not using any at all. If you’re stuck in a black-and-white world, using different grey shading or graphic textures can go a long way to helping you show information.

Don’t try to put too much information into a chart. Your charts have to be easy to understand at a quick glance. If in doubt, get someone to do the quick glance test – show it to someone who hasn’t seen the chart before and ask him or her to tell you what the chart says. If they get it wrong, it is back to the drawing board.

If possible, it is worth thinking about the best time of the day/week/month for colleagues to receive your information. Pay attention to lighting, room temperature, room size and seating arrangements – it all adds to the effectiveness of your presentation – and be sure to stay within the allotted time.

There is no doubt that to reach fellow staff members who are busy fulfilling other aspects of the mission, paying attention to financials is challenging, but giving non-financiers a reason to listen (such as by demonstrating the value of the information) is the key.

It’s not easy, but with some planning, creativity and perseverance, it is possible to get  non-financial people to begin to understand and care about the numbers.

 

"The challenge and opportunity for trainees and accountants is to learn how to make the numbers come alive for those who don’t easily know how to interpret the figures and help them accept and embrace the numbers as a vital step on the path to achieving the ultimate aims of the organisation"

"Don’t try to put too much information into a chart. Your charts have to be easy to understand at a quick glance"

"Consider visual aids to help. Approximately 85% of the information stored in our brains is received visually"