This article was first published in the November/December 2016 China edition of Accounting and Business magazine.

At a briefing I attended recently, the speaker began by pointing to the ceiling. ‘The ceiling of this room is 1,200 square feet and it is 10 feet from the floor,’ he said. ‘That’s data.’ It’s data lacking context to be turned into information. ‘But when I tell you that this 1,200-square-foot ceiling may fall 10 feet on all of us,’ the speaker continued, ‘that’s information – and a call to action.’

I thought of that anecdote after listening to yet another CFO bemoan the business’s response to the reports prepared by her financial planning and analysis (FP&A) specialists – which is no response at all. I don’t think they even read them, she said, despite the long hours spent collecting the data, analysing relationships and correlations, and generating the report. 

Perhaps it’s because they are simply a collection of data. Maybe those pages are filled with numbers about the height of the ceilings and the square footage of the floors, and nothing much about whether the space is appropriate for the purpose and what needs to be done to improve the safety of the structure.

To be fair, it’s not easy for finance professionals to turn data into information or, even at a more basic level, to distinguish between data and information. Financial statements tell fascinating stories. Why can’t others read the numbers the way accountants can?

The answer is that those outside finance – executives in operations, strategy, marketing, sales, supply chain, human resources – do not necessarily share the finance professional’s mindset. These business partners require a narrative – words, charts, illustrations – to grasp the heart of the analysis, to be convinced of the rightness of the chain of evidence, and then to be persuaded to take the recommended course of action. That means the report contains not just data but real information. It’s not an impressive data dump, but judiciously chosen numbers that tell a compelling story. 

I am reminded of what the CFO of an architectural firm in Hong Kong once told me. He requires his FP&A team to always make sure that once the board and others in the company read their report, they say: ‘I didn’t know that.’ Otherwise, he says, there’s no point in writing the report and wasting other people’s time. And not every analysis or FP&A project should end up with a report, he points out. When the facts bear them out, FP&A is perfectly correct in telling the business unit that commissioned a study: ‘There is nothing here, so we are discontinuing the project.’

The pendulum can swing too far the other way, though. Like bad journalism, the words can become unmoored from the information and a kind of sensationalism can take over in the pursuit of the ideal of presenting something new that the reader did not know before.

The touchstone, as always, is balance: just the right level of colourful language to catch and hold attention; short sentences and brief paragraphs; absence of jargon and polysyllabic words; fewer tables, more graphs and charts; conciseness and clarity, not complexity and confusion. 

Above all, make sure that data is turned into information. Don’t write about the height of the ceiling but about how lowering it will cut construction costs. Don’t focus on the number of chandeliers but on the feasibility of changing to LED lights without losing the elegant ambience that allows premium pricing for the use of the ballroom.

In the process of writing the report, always ask yourself: is it data or is it information? Make sure the answer is always the latter.

Cesar Bacani is editor-in-chief of CFO Innovation