Financial reporting is only as impactful as the level at which the audience understands what is being presented, how it affects them, and how they might interpret the information. If the meeting is full of finance-savvy team members, it can be a cakewalk.
However, explaining the numbers to non-financial executives can be a voyage riddled with rough waters on an uncharted course.
How does a CFO or finance business partner know for sure that they’ve got their point across?
That's exactly what we'll help you with in this post.
- 1. Have empathy
- 2. Tell a story
- 3. Adjust to the audience
- 4. Keep it relevant
- 5. Less is more
1. Have Empathy
Not all Executives come with the same level of understanding of data and financials. Perhaps prior roles did not require them to have a clear understanding or they weren’t empowered to understand their impact on the financials.
In these instances, being thrown into a slew of numbers can be daunting. Their hesitation to sit through a financial conversation may be less about their indifference toward results and more about their lack of understanding of them. When presenting financial data, understand some may have never had to attend a finance or accounting course, or it’s been years since they have, they’re not likely to understand what the Finance partner is talking about.
A little empathy for non-financial team members can go a long way. It can help ease the tension experienced during meetings and conversations. Plus, it can help the Finance Team create a strategy for overcoming these obstacles using the following tips.
2. Tell a story
Sharing numbers on a page with all of your backup files might be the fastest way to present data, but not the best way to engage an audience who needs to use that information to stay informed and make decisions. Narration and storytelling is one of the oldest and most effective ways to share information, including Financials.
Consider using slides or memos to summarize the key points in clear tables, grids, visuals, and text to convey a story. One best practice is to use fewer words to communicate as much of the key takeaways as possible.
“Sales from our new product launch are up from $900K last quarter to $1.2M this quarter (33%), which is ahead of plan by 15%”
“Quarterly new Product revenue trending 15% above plan, up $300K (33%)”
In roughly 10 words, we just communicated the what (new product revenue), when (quarter over quarter), the “so what” (it’s up above plan), without extraneous words and fillers.
The major takeaways in for narration should always include how performance compares to a plan, and what they should walk away understanding:
- Are we on track?
- If not, why?
- What should we do about it?
- What should I be happy or concerned about here?
3. Adjust to the Audience
Consider the audience in advance of crafting the format of the presentation. Summarizing information in a clear and understandable way works for everyone, but the level of detail on the backup to the number can vary with the sophistication of the audience. One can always prepare for both by presenting summary information but having an appendix or backup for additional detail.
4. Keep it Relevant
Everyone at the presentation is there to understand what targets they met or missed and what to do going forward. Keep the data as relevant to the people in the meeting as possible by relating the data back to their business segments and performance when possible. This helps keep their interest and allows them to focus on the takeaways that they can bring back to their team.
5. Less is More
Though the Finance Team likely spent hours or days compiling the data being presented, some leaders may not be able to handle the level of details that finance teams are accustomed to working with. Keep business presentations concise but plan to backup the data if asked. Some people may want to understand all the information that went into the results. Make sure to keep the details on hand and be able to explain them effectively if questions come up.
The Final Takeaway: Build Confidence
The best way to explain financials to non-financial executives is to build their confidence in understanding financial data if it is not an area of strength for them. Consider rolling out a Finance 101 series to the company to educate on the basics of understanding one’s budgets as well as how to read financial statements. These small acts can create trust between teams and help everyone become more invested in financials. Approach everyone with empathy and create an environment of learning as a team.