Nine management reports every CFO needs: management information that counts

21st Sep 2021
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Management reports that count that every CFO should have access to include future forecasting and historic data, along with a mix of financial and non-financial reporting to make better, more informed strategic decisions.

Different businesses will have different reporting needs. Although not a definitive list, the following are based on our experience of working with growing companies. Management reports that shuld be at every CFO's fingertips include:

1. Cash and cashflow forecast

Unless you’re sitting on large cash reserves that just keep growing, this should be right at the top of your list! Clear visibility of your current cash position and future expected net cashflows, along with timing, is paramount. A medium-term forecast should be integrated with cashflow, P&L and balance sheet forecasts. The shorter 60 or 90-day forecast can be a one-sided cash-only view, but reconciled to the opening balance sheet position.

2. Objectives & Key Results (OKR) reporting

It may seem surprising but less than 50% of FTSE100 companies align their reporting with their objectives. This number is much lower in SMEs. Some OKR reporting may be embedded in other reports but, in our experience, this is very poorly reported. 

It doesn’t need to be in an OKR format but reporting on specific business objectives and progress is essential. Often specific project initiatives are set up to meet shorter term objectives, so reporting on these separately is often the best way to focus on them.

3. Risk reporting

Traditionally, this may not have been an area that finance has owned. However, modern CFOs increasingly act as chief steward and are moving into the role of Chief Performance Officer. Ownership of risks around performance improvement should certainly be part of that remit. In most SMEs, financial risks are present, so it’s a natural extension for the CFO to report on these and wider risks.

You should maintain a register, containing business risks, likelihood rating, impact to the business rating, along with proposed mitigating response to the risk. Early awareness of risks is often enough to set the right plan in motion to weather the storm.

4. Sales forecast or customer pipeline

This reporting focuses on where future sales may come from. In your business, that could be your sales forecast or your customer pipeline. Financial numbers on here are relevant, of course, and feed into your overall cashflow forecast. However, the important aspect is the number of customers, who they are (in a B2B world), probability of conversion, when they will materialise and their lifetime value.

5. Consolidated & segmented P&L, balance sheet and historic cash flow

The bread and butter of every CFO reporting period. Past performance, particularly segmented, is very useful to understand high performing business units, products, channels, or individual sales consultants. Understanding past performance while still looking forward supports management in making better, more informed decisions. However, the key to learning from the past is through segmentation.

We’ve seen limitations at both ends of the spectrum – disaggregated and aggregated information. It’s important to have both – a consolidated view top-down and the ability to drill into sufficient segmented detail to get a deeper understanding of what is working and what is not. Like all reporting, it’s all about applying smart changes to the business.

6. Product/sales mix & concentration

This is really a sub section of the consolidated and segmented P&L. Going even deeper into product/sales mix and concentration will give you even more insight into what matters. For example, you’ll gain a better understanding of what is working well with customers and how to grow your top line.

7. Segmented gross margin/contribution

This is important when benchmarking different parts of a multi-entity business, such as business units, locations, channels, or sales teams. Understanding gross margin at a segmented level first helps you to identify which parts of the business are providing greater contributions. Then, by using it to benchmark, you can apply lessons from top performing parts of the business to lower performing parts to raise the overall average across the business.

8. Customer data 

Customer-centric reporting is key to focusing on performance. In a B2B business that’s specific on customers and debt. In a B2C business that could be more focused on repeat orders or customer acquisition channels.
In both, it could be customer acquisition cost, churn, new customers, customer satisfaction or NPS score. The point is, your performance reporting should include some form of customer reporting to better understand your customer behaviour.

It’s not unheard of for even large companies to be unable to identify the global spend by customer. Don’t fall into this trap!

9. Internal productivity

There are many ways to measure productivity and they differ by business and sector. Nonetheless, it’s something that you should reported on and monitor. Again, even within the business, benchmarking is a powerful way to learn more about successful and efficient processes, people and departments. Understanding this leads to better decisions and overall business improvements.

In addition to these nine reporting themes, a leading finance function will have the ability to:

•    Report on more than just financial numbers
•    Mash financial and non-financial metrics together to enrich the data
•    Spend more time on understanding and decision-making rather than preparing reports.

Multi-dimensional reporting

AccountsIQ's multi-dimensional financial reporting capability is much loved by customers such as The Irish Times and Apera Asset Management. 

"AccountsIQ is intuitive enough that it’s easy for me to run a report or get a quick snapshot on performance at any stage throughout the month.  Personally, I have more visibility, I can ask more questions, I can drill down into the detail and it’s simple to do all this in AccountsIQ. It has made a real change to our reporting processes. The consolidation functionality is also a huge asset within the system and significantly reduces month-end close to allow us to get that Group view immediately” Mikie Sheehan, FD, Irish Times.

Read the Irish Times case study.

Check out how easy it is to get financial visibility in our Multicompany Accounting, Consolidation and Reporting live webinar this Thursday

Date: Thursday 23rd September, 11am

Reserve your place