Financial reporting might seem irrelevant to those steering an organization. It’s the finance team’s job to convince them otherwise.
This is a variation on the old if-a-tree-falls question: If a report comparing budget to actuals is sent out and nobody reads it, does it make an impact?
It may sound like heresy to seasoned finance professionals, but that’s one of the controversial pieces of advice from Kate Sayer, an auditor who recently wrote some reflections on a site called Third Sector. Sayer not only recognizes the challenges CFOs and their teams are under – she’s pretty direct in suggesting that some things may need to be reprioritized, or least approached a lot differently:
Look at the data you already have in the finance department – could you analyze this and present it a different way in order to provide some useful information for managers? This does not have to be complicated – a recent example is the new finance manager who analyzed the level of take-up needed for a particular type of project to break even. The managers were astounded – they had been asking for similar information for years and had always been told it was too difficult. Now they could look at their decision-making process afresh and develop clear financial criteria for closing projects and opening new ones. That finance manager now has credibility with the other managers.
Consider Sayer’s advice step one in a long-term approach to repositioning the role of the CFO. Once that credibility has been built up, the next step is how to leverage it and bring greater value. For that, you could turn to “Skills Worthy Of A CFO,” which was published in CGMA Magazine and talks to several experts about where finance leaders should be spending their time. The short answer is, everywhere, but one of the interesting aspects was what the author described as external forces.
“These include capitalizing on global opportunities, managing risks of political instability, making the organization more attractive to young job candidates amid a talent drought, taking advantage of capital markets to secure capital at low costs, navigating regulation, and mastering digital challenges and opportunities,” the article said.
This is not to suggest that the CFO necessarily have a specific action plan around each of these items, but they should be prepared to come to the senior leadership table with at least an awareness and some thoughts on how those issues align with areas where they have access to information and insight. Yes, you should want to be working on reports that everyone wants to read, but you should want them to provoke a meaningful discussion afterward.