Keep The Message Clear and Simple When Communicating Financial Information

You learned a lot in your professional accounting exams.  Some of it very complex.

On the other hand what about communicating financial information?

Yes you might be able to rattle off the stock phrases of it being relevant, reliable, timely and understandable in an exam.

In organisations it’s a lot tougher than it seems.  A good guide principle is to keep it clear and simple.

What does that mean in practical terms?

Avoiding jargon

Every profession has it’s own technical words.  Finance is no different:

  • Accruals
  • Prepayments
  • ROI
  • ROCE
  • NPV
  • Variance
  • And many more

The problem is these are words and acronyms that are meaningless to those outside of finance.

So avoid using when communicating financial information.

Being audience focused

You are not producing financial information to keep you busy.

You are preparing it for the benefit of those that are using it.

Think about your different audiences.

What would be helpful for them?

If you don’t know show them some options. 

Get into dialogue with them about what would help.  

Understand what they are trying to achieve and provide them information that supports them.

Understand that different people have different preferences

Some love visuals (pictures).  Others are more auditory (sound).  Others are more kinasthetic (feeling).

Try to mix and match to hit the different preferences.

State any assumptions

You never have all the data or knowledge you need.  You will have uncertainties. 

You will have to make assumptions at times.

Make sure you clearly and unambiguously state any assumptions on what your information is based.

Avoiding long winded reports

I remember there being an obsession with long winded reports when I worked in the NHS. 

Hours were spent on these reports. 

Few bothered to even read them.

Brief reports rather than long winded reports are much better in my experience.

Make it clear what you want people to do

In marketing they speak about having a clear call to action in every piece of marketing material.

Essentially telling people what you want them to do next.

It’s a concept that’s really transferrable to finance (and indeed other business reports).

You might for example want them to:

  • Discuss
  • Approve
  • Decide next steps

What you want to avoid is leaving the reader confused and having to figure it out for themselves.

Remember a confused mind does nothing.

In truth there are always improvements that can be made when communicating financial information.  Take one action to improve your communication and measure the impact.

About the Author Duncan Brodie

Since 2006 I’ve worked with in excess of 8,000 accountants and professionals in workshops, seminars and one to one helping them land their next jobs and become better leaders, presenters and business partners. Before that I spent 25 years in accountancy climbing the career ladder from Payments Clerk to FD. I’m a CIMA Fellow, Certified Professional Coach and Team Coach Facilitator.

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