Sometimes working in nonprofit finance can be frustrating.  A tremendous effort goes into carefully planning, recording and reporting financial information to meet regulatory and funder reporting requirements and provide actionable decision support information to the organization’s management team.  What we hear very frequently is that managers in some organizations seem indifferent about the information that is provided to them as part of the monthly reporting cycle.  In the worst cases, the emails containing the carefully prepared budget and transaction reports go unopened.

Why do the managers in your organization seem disinterested or indifferent about the information you are generating?

You don’t have a lot of room for creativity when it comes to producing mandatory compliance reports.  Let’s set those aside for a moment.  When generating decision support reports for internal audiences, here are some considerations that can help improve the relevance and utility of the reports for the audience.

• Don’t assume they understand your Chart of Accounts – whenever possible, summarize information into categories that are understandable and meaningful to the audience.
• One size does not fit all – While practical and efficient for finance to produce identical reports for every context, not all audiences have identical requirements for information.  They also can vary widely in how they use the information.  Customize the content be produced to make it usable and relevant to the consumer.
• Identify context for the financial results – Dollars and cents alone don’t always tell a complete story.  How many clients did we serve during the same period?  What was our cost per service unit?  Is that improving or not?
• Timeliness matters – If the reports don’t go out until three weeks after the reporting period ends, the information is mostly stale and is often not actionable.  If there is no practical way to put near real time data in the hands of managers, put it in a longer term context so they can see the trends and anticipate where they will end up.
• Consider the vehicle – Some managers immediately start feeling drowsy any time they see anything that looks remotely like a financial statement.  Use tools that allow you to provide appropriately formatted content characterized in a way they can readily consume.  Providing visually rich, interactive dashboards is much more affordable and easier to realize than you might think
• Educate – Don’t assume that non-finance managers know anything at all about how to properly read a financial report, regardless of what form it takes.  Invest the energy in educating the consumers about what they are viewing and how to use the information.

As a finance professional, the biggest impact you can make on your organization is to empower good decisions.  Compliance is important, but the long-term growth and sustainability of your programs is dependent on the operational foundation of strong business process, healthy systems and access to actionable decision support data.  If you are suffering from some of these issues and would like assistance examining your reporting processes, JMT is standing by to help.