What do you do if your financial reports are confusing non-finance professionals?

Just report revenue, gross margin, EBITDA, and cash. Most other KPIs can be calculated from there, and those four line items usually take up 80% of the conversation.

- Simplify language, avoiding complex jargon - Use visual aids like graphs and charts - Provide context by comparing data to past performance or industry benchmarks - Focus on key metrics relevant to organizational objectives - Keep reports concise and to the point - Schedule meeting to walk them through the interpretation and analysis of the data - Encourage feedback for continuous improvement

The best way is use more generic and globally accepted language when defining financials. Focus should be on key KPIs since usually 20% of the KPIs can define 80% of the progress. Some industry specific items can be placed as 'Good to Have' which can be defined clearly again.

Utilizing visuals like charts and graphs can help - For instance, imagine using a pie chart to show how much of your monthly budget goes towards marketing, replenishing inventories, and salaries. Second, simplifying the language is crucial. Instead of saying "EBITDA," I'd explain it as the money a company makes before taking out taxes, financing costs and other non-cash expenses. Further, try putting numbers into context. For example, relating the increase in marketing spending to the goal of expanding market share can help stakeholders understand the rationale behind financial decisions. Lastly, focus on the most significant figures that are relevant for the non-finance guys rather than all the line items - to prevent overcomplication.

This also depends on the audience- it’s important to tailor your message. For example if it’s an all hands town hall with a wide range of professionals from staff to executive level, I’d recommend simplifying to the key metrics only such as Organic growth, EBITA and Cash Flow. I’d also include for context and perspective a comparison versus AOP and prior year actuals.

Using visual aids is beneficial when non-finance professionals are not understanding the report. Using charts, graphs and other visual aids is super helpful to the audience. They are able to understand the information clearly, even if they do not have a large grasp on the financials. Make sure that everything is labeled and still use simple language too. Encourage that they ask questions if they are still confused.

Tell only 1 thing. 1 chart/Graph/Pie any visual is aimed at conveying 1 message. Do not overcomplicate because there is a lot of data. Your analysis reveals one key message: growth of a division; loss on a product line, etc.. Make visualization emphasizing this. If you have 5 messages for one visual, you cannot expect others to understand.

Well-designed visualizations such as charts make difficult financial concepts easier for non-finance professionals to understand. Be thoughtful when choosing the right chart type to convey your message. Consider your audience, the points you want to make, and the characteristics of your data. Line charts are great for illustrating trends over time. Bar charts show comparisons among categories. While a pie chart can be helpful to display relative proportions, it will look cluttered if it contains too many data categories. Keep the visualizations simple and uncluttered. Label your data points and axes. Use consistent scales and color schemes.

Its easier for non-finance professionals to understand infographics as they make information more digestible and memorable. I prefer using simple language and data visualization tools to create colorful presentations. For instance, using a world map to show sales/revenue, and expenses by region/city.

Tell a story that connects to broader organizational goals or challenges. Use analogies like comparing a company's balance sheet to a personal budget can make it more relatable. Conduct interactive workshops or training sessions where non-finance users can ask questions and engage with the material in a hands-on way. Use case study examples from other companies or industries to illustrate key financial principles or strategies. Provide regular updates and opportunities for dialogue to reinforce understanding and address any lingering confusion.

Consider organizing finance basics training sessions. Equipping your non-finance professionals with fundamental financial literacy will better empower them to interpret reports independently. I like to do this at the beginning of the fiscal year--doing both a comprehensive review of the finalized budgets for the upcoming year as well as a '101' of key terms and concepts, explanations of how business inputs (like accrual information, time entry for software capitalization, etc) are used and how they impact the financials, as well as identifying key contacts for when there are questions.

Streamlining a summary eliminates unnecessary distractions, focusing solely on pertinent information for each stakeholder. Neglecting this can lead to irrelevant inquiries from stakeholders, with answers that may either be inconsequential to them or confidential to disclose.

I believe this is one of the best approaches you can take. Getting feedback from other departments and then implementing their feedback into your work, shows that you listen and are flexible (which I believe is a sign of a good team), and you strengthen your working relationship with the different departments which ultimately makes the next road bump that much easier to resolve.

I do find it very useful to provide stakeholders with executive summaries, followed by a deeper dive for those interested in getting in the weeds of things.

Solicit feedback from non-finance professionals if they are needing clarity on the financial reports. You must highlight to them that they can ask questions anytime, even if they come up later. Have regular meetings can allow for this feedback channel to be simple. Make sure that there is two-way dialogue between both sides. Having a feedback loop allows for improvement in financial information to be understood better.

I would simplify it by using clear language, visual aids like charts or graphs and providing explanations for any complex terms or concepts.

Be to the point That is it, no need for too much deatiles and abbreviations and making life hard for your audience. Dashboard, photos and simple data presentation will help more. In addition to some MOM and YOY comparison / variances analysis will help more.

Recently, we hosted a financial reporting training for our non-finance team members. Our objective was to simplify complex financial concepts like revenue margin, cost, profit margin, depreciation, and cash flow. We gathered feedback beforehand and tailored the presentation to their needs. During the session, we used practical examples to ensure clarity. A quiz at the end helped us gauge progress, and participant feedback guided improvements. This approach successfully bridged the gap between finance and non-finance professionals, motivating us to enhance future session.

Corporate finance does not use as many jargon terms as engineering and technology fields, but people without expertise in this area still struggle to understand financial issues. Many of these difficulties are due to the unique concepts of accrual accounting, including revenue and cost recognition. In my experience, the most effective way to explain accrual accounting is by using examples. Fortunately, the reports you have to explain is the most relevant example. It's also important to take questions from people. Questions are where the audience is confused, so answering them clearly is a good way to keep everyone on the same page. Of course, you should be very well aware of the report and the corresponding accounting principles.