The ten basic steps to getting finance reporting - to a "YES"

I have just finished another Toolkit. It is called "How to write a finance report that people read and leads to a “Yes” - Guidelines, rules, and one page E-templates to get your report over the line. This is an extract from it.

1.   First get smart with your time - to free up more quality time

You will never be successful if you do not devote your best self to the report. That means adopting time management techniques and controlling that beast the email so that you have more quality time to craft that report.

2.    Achieving a common understanding of the assignment

I promise you one consistent thing in life is that with every communication there is a mis-communication. Your job is to minimise it. As night follows day your manager will have left something out in the quick debrief. Since you will need to explain, in the executive summary, about the scope of the project you should write your understanding early on and get it approved by your manager more than once!

3.    Planning your research

You need to think outside the box here. Think about:

1. The oracles you will need to interview and get on-board the project
2. The organisations that are already doing this that we have a connection to. Your research may well lead to working collaboratively with competitors for as Peter Drucker said, “Your backroom is someone’s front room”.
3. What research strings you will use on the internet such as “______ (topic)”+ pdf or “______ (topic)”+ “best practice” + pdf to search for reports on the topic
4. Who are the relevant suppliers? Construct a shortlist of relevant suppliers before making contact
5. What has been done in the past? You can guarantee you will not be the first to think about this in your organisation. Find that report.

4.     Design a compelling graphic to tell the story

Early on in the project you need to think how best to show the compelling evidence you have gathered.

Florence Nightingale revolutionised the use of statistics to create a compelling argument and was one of the first to use diagrams to communicate her analysis of casualties. Her diagram is revered as a forerunner to data visualization as we know it today, see Exhibit 1.

Exhibit 1: Florence Nightingale’s diagram on war casualties

5.    Interviewing techniques when doing research

Throughout your working career you will be involved in projects where you are looking to solve an existing problem, introduce change or assess which new system would work better for the organisation. You need excellent interview techniques in order to extract the valuable golden nuggets of information that exist waiting to be discovered. If I was preparing my questions to investigate a particular process within an organisation. I would ask:

1.  Who is involved in this _________process?
2.  Who should be involved in this process who currently is not involved?
3.  What are the main issues around this ________?
4. What would you like to see changed if you had a magic wand?
5. What are the main benefits of the process?
6. Why did this process develop in this way?
7. When are the main tasks performed?
8. How long has the current process been operating?
9. When was this process last reviewed? Was there a report? Do you have a copy?
10. Who else should I talk to about this process?

You simply use the Who, What, Why, When, and How as guides to the type of questions.

6.    Ensure your graphs comply with Stephen Few’s rules

Become a disciple of Stephen Few. He has spent more time thinking about communicating through graphics than anybody else. Data visualisation is an area that is growing in importance. No longer is it appropriate for well-meaning accountants and managers to dream up report formats based on what looks good to them. There is a science behind what makes data displays work. The expert in this field is Stephen Few. He has lodged many high quality white papers on the topic of graphical displays www.perceptualedge.com/articles ).

7.    Planning what you want to say by using Post-It stickers

Far too often the writer will leave a report to the last minute and then in a hive of activity complete it feeling very righteous. Invariably, while well written it can never have the persuasiveness of a paper that has been meticulously planned.

A great technique is to first map the subject headings out in a mind map. Then do a mind dump on Post-It stickers covering all the points, diagrams, pictures you want to cover in the report. By turning the adhesive part to the left I can write five thoughts per Post-it sticker. I then cut them out and place them stickers where they fit best. Using stickers makes it easy to re-organize them. Y

Using outline in word. In outline you select how many levels you want to see. If you chose all of them the whole document is there. I normally select the first two levels. When I move a second level heading all the subheading and text move with it. If I add a heading it is in the document awaiting text. The + sign indicates that there are subheadings that sit below this heading.

8.    Have a report style you keep to

As early as you can adopt a report writing style that contains as many better practices as you can muster and gets the message across. You style should be you and a reader should be able to recognise the writer from the phrasing.

Why do we waste so much real estate? Why not title the January Finance Report-‘Recovery better than expected’ or ‘Still away to go before remedial measures take effect.’ Each heading should summarise what is in the paragraphs beneath it. You are in effect becoming a journalist who wants to prick the readers’ interest.

After 40 years of report writing, I would recommend the following order for most reports:

• The burning platform- Always start with this as you need to say early on why “You better read this”.
• Executive summary- Now you have their attention give them the summary recommendations, just in case they are in total agreement, and it is a done deal.
• The oracles that were interviewed = It is important that these are listed early on and important quotes from them are highlighted in italics.
• Recommendation #1 supported by findings, recommendation #2 supported by findings etc.,

Now we use the inverted pyramid style of writing. Start with your main recommendation and then support it with your main arguments and facts. Answering in effect a series of why questions. This technique means that those who agree straight away do not need to bother with the whole logic. That is for the doubters.

9.    Getting your presentations persuasive

So often we under sell our ideas or poorly present the results through spending too much time on the report and too little on the all-important presentation. A presentation to the Board or executive team is one of the few times these people see you in action. It is thus important to get it right and we need to embrace the better practices around “winning” presentations. I have set some practices in a previous article.

10. Adopt these quality reporting processes

Using sound quality assurance processes will mean you can turn up at meetings knowing that your document is internally consistent.

• Ban all late changes to the report - Once the report is prepared, no adjustments to the numbers should be allowed unless they are very material. There is nothing worse for the finance team than to submit a finance report to the CEO that is inconsistent. This is frequently caused by a late change not being processed properly through the report. As night follows day, the CEO will be sure to find it. I am sure many readers have been guilty of this one.
• Check numbers for internal consistency-Ask a colleague to carry out this exercise for your next report. Print the report and ask them to mark all pages with a number, e.g., for a five-page report mark 1 of 5, 2 of 5.  For every number that appears elsewhere, either in a box, table or graph write the page reference where it appears again, by the page number, and initial to indicate that you have checked this number in the subsequent page, and it is right.
• The two-person read through= For all reports going to the C -Suite or Board you should use a two-person read through. I learnt this technique, like many of you, when I was an auditor. The originator of a report gets another person to read aloud the report while they follow the words on another copy. By hearing the words, the writer can check the ‘dance of the words’, their rhythm, and amend to correct spelling, grammatical errors and make it an easier read. 
• Text to voice facility - Set up in your 'quick access bar' the “speak selected text” option. Select “more commands”, and then select “all commands”. You will then get an alphabetical listing. This is a valuable tool for a read back. I use this facility on all emails and smaller documents. This tool is available in Word, Excel, PowerPoint and Outlook and most likely in other applications.
• The author should do a final check for the “two gremlins”- The two gremlin rule states that in every piece of work there are always at least two gremlins that sneak through. If I find them and they are minor I leave them and release the report. If you do not find them look again or someone else will spot them. I would always change typos in the first couple of pages or in the recommendations, as these can undermine the report.

11. Limiting the use of Excel in reporting

Be very wary if you are utilising data from large spreadsheets. Some of the common problems with spreadsheets are:

Broken links or formulas - An individual might add or eliminate a row or column so that, when a group of spreadsheets is rolled up, the master spreadsheet is taking the wrong number from the one that was modified.

Consolidation errors - Often, a spreadsheet will lock up or show a screen full of “REF”, “REF” “REF” errors, because it was not designed to be a tool for handling a rollup of dozens of different worksheets.

Input of the wrong numbers - Entering the wrong number can happen in any process, but spreadsheet-based systems often require rekeying of information, which can produce data inconsistencies. A spreadsheet might use a look-up table that is out of date, or an entry might have been inadvertently or mistakenly overwritten.

Incorrect formulas - A subtotal might omit one or more rows, columns or both. An individual might overwrite a formula because they believe theirs is more accurate. Or someone might use an outdated spreadsheet. Or allocation models might not allocate 100 percent of the costs. Allocation methods might be inconsistent.

No proper version control - Using an outdated version of a spreadsheet is very common.

Lack of robustness - Confidence in the number a spreadsheet forecast churns out is not assured. In large spreadsheets you will not have the time to check all the formulas because they can reside in any cell of the spreadsheet.

Inability to quickly accommodate changes to assumptions - What would you do if your CEO asked, “If we stopped production of computer printers, what would be the financial impact? I need the answer at the close of play today.” Your spreadsheets are not able to provide that quick answer.

Designed by accounting staff - Most accounting staff have not been trained in system documentation and quality assurance, which you expect from a designer of a core company system.

Lack of corporate office control - Many people in a business can use spreadsheets to create their own forecasts at a ridiculous level of detail. This can lead, as a friend once said to me, “To the march of a million spreadsheets.”

12. Avoid unnecessary detail

Always report meaningful numbers. Is it necessary to report sales of $23,456,327? Surely $23.5 million is much easier to read and relate to. Think in big numbers like the CEO does. If a number is not on his radar than round it out.

13. Remember the decision maker is an alligator

Zoe Chance, an associate professor at Yale, focusing on decision making and behavioural change talks about the two states we can be in when deciding. The alligator state when the decision maker does not want to work hard and involve much cognitive resources, but instead will go for the easiest option. The courtroom state when we look at the decision from both sides and seek to come up with a rational decision.

In reality the alligator state wins out so you have to make it easy to digest, approach them at the appropriate time ( alligators eat less than 50 times a year), and take all the complexity out of the decision making process.

This article is an extract from "How to write a finance report that people read and leads to a “Yes” - Guidelines, rules, and one page E-templates to get your report over the line.

[i] Zoe Chance, Influence is your superpower - how to get what you want without compromising who you are

[ii] Frances Booth, Distraction trap: how to focus in a digital world

[iii] John Kotter, 8-Step Process For Leading Change, Finance & Management Special Report March 2014

[iv] Jon Moon, How to make an IMPACT: Influence, inform and impress with your reports, presentations, business documents, charts and graphs, Prentice Hall, 2008

[v] David Parmenter, The Leading –Edge Manager’s Guide to Success- Strategies And Better Practices, John Wiley & Sons 2011