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‘It’s An Art’: Explaining Financials to Non-Finance Colleagues

  • By Ira Apfel
  • Published: 6/1/2015

FP&A professionals can practically read numbers with their eyes closed, but do the numbers really speak when they present them in meetings? Can FP&A staff explain the story to non-financial audiences?

At the recent AFP FP&A Leadership Summit, Jokim Pluijmers, Head of Planning & Control, Consolidation & Reporting, ING Nederland, led a session on communicating FP&A’s story. It is indicative of how challenging that task is that Pluijmers offered more questions than answers. “It’s an art more than a science,” he said, and attendees agreed.

8 tips for communicating numbers to colleagues

You have to tell a story. “What is the real message you are trying to convey,” said one FP&A manager in attendance. “Are we on track? If not, what are you going to do about it? Too often FP&A will say the obvious: ‘You didn’t make your projections.’ People want to know what they should do.”

Don’t be afraid to be concise. “There’s a risk of FP&A analysts looking at data for three days making it hard to justify putting a summary into two sentences when you’ve spent so much time on the data,” another FP&A manager said. “You want to prove that you worked long and hard. But the CFO doesn’t care. We see this mistake as a risk, so we try to do as much as we can in graphical format.”

Know your audience. “Our old CEO was from finance so he had a clear vision of what he wanted his financial reporting packages to look like,” an FP&A manager said. “The new CEO is from sales so the new reporting package is different, let’s just put it that way.

In fact, each slide can be tailored to different audiences, an attendee added. “What’s the central message on each slide,” she asked. “It’s like an onion. The outside slide is for the CFO. The next slides are for the next level. Leave the details for the end of the reports.”

Be prepared to defend your numbers. “We had to defend the analytics for a while,” said one FP&A professional. “In front of a micro-manager you may have to defend them. You just have to take a systematic approach to your financials. Be very consistent with your presentations and spend lots of time cost-checking. There’s a point where no errors are allowed. But now that situation is done and we’ve built credibility. When you feel some level of comfort, then you can introduce more analysis.”

Make the data directly accessible for users. “We can organize the structure in which they get to see the data, but at some point they have to act on it,” said an FP&A head. “There’s people who expect us to prepare the data and send comments.”

However, one attendee disagreed with this approach. “When you make too much available they may be making wrong analysis of the numbers,” she said. “You have to limit it: This is the one KPI you should manage.”

Use your reports as the start of a financial discussion. “Producing the report is an entry ticket,” one attendee said. “What happens is you gain trust, you discuss through quarterly reviews, and then they invite you to join other committees. That’s when I become most effective. I can contribute in the right moments when they’re neglecting things from a metric or shareholder perspective.”

Experiment with formats. One FP&A manager said she has settled on a one-pager after many experiments. The one-pager includes KPIs, and on the right side of the page she includes observations of the results. The second part of the one-pager consists of concerns and questions. “We also include action items based on what they will do to with these concerns,” she added. “We use rolling forecasts to see trends.”

Offer only as much data as you think helps the organization. “If you don’t think your company is fairly valued by investors or shareholders then you need to disclose more,” one FP&A executive said. “We started doing more on actuals of separate business units for analysts.”

Added another attendee: “We offer very little forward guidance as a rule. Investors can track this but internally we track it from separate metrics.”

Finally, know your role. “Do you challenge [during presentations] or add value? It depends on the organization,” an attendee said. “If the CFO has to sign off on it the business units will come to him. If not, you might have to challenge more.”

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