2 magical questions for better reporting

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Reporting is simultaneously the greatest gift and the largest curse of FP&A.

Why?

It’s awesome because reporting is a tangible value-add to an organization.

One day people have no idea what’s going on… the next day, they do!

But reporting can also grow to take over FP&A’s capacity - limiting us from achieving higher levels of adding value (analysis, forecasting, consulting).

It’s both the foundation of our value and potentially the limiter.

So how do we maintain the right balance?

Ask the 2 magical questions:

1. Who’s the audience?

2. What’s the purpose?

These 2 magical questions reveal the true nature of any report.

And help you understand if the report is in danger of becoming a Frankenreport™️ (e.g. a report that tries to do all things for all people but ends up doing nothing well and just scaring everybody who has to update it)

Here’s a couple examples of why those questions are so magical:

Who’s the audience?

Fair warning: these questions sound basic and not helpful for advanced FP&A teams.

That’s exactly the trap most people fall into.

See, when you are a beginner in FP&A you can only build basic things. So that’s what you build.

But when you become advanced, you start building advanced things. And these advanced things actually get you in trouble.

You embark on a month-long journey to build 1 report to answer everybody’s questions about a particular topic. And while you may be successful in building it, 1 small change in data quality or business strategy blows up your masterpiece of a report.

Or you hand the report off to the new guy for your 2 week trip to Spain to run with the bulls - only to come back and find your masterpiece full of circular references.

That’s why I recommend sticking to 1 audience for each report. Those audiences can be:

• Internal FP&A/CFO audience

• A particular business leader

• The board

• The ELT

• Front line workers in a particular department

You can see that my 1 audience rule can actually apply to a specific person, or a specific group of people that can be treated similarly.

Another common pitfall is extending a report up or down a level.

For example, you may have a report for your Head of FP&A to review the forecast. Turning that same report into a high-level forecast review report for the business partner has the potential to water down the report or be incomplete for that audience.

That business partner probably wants to see different things than your Head of FP&A wants to see - and that will drive new data and a bloated report.

It’s hard to see exactly where the line is, but you’ll know it when you crossed it.

Here’s how: the report is no longer optimized for the original intent

What’s the purpose?

It sounds silly, but when was the last time you reviewed each report to understand if it’s accomplishing it’s original purpose?

Do you know what each report’s original purpose is?

In FP&A teams that are over capacity, you’ll typically find legacy reporting that is bloated (back to the last question) and FP&A can’t explain exactly how it’s leveraged.

The reason it’s so important to understand is because the report design should match the intent.

• Weekly KPI meetings should have a basic report updated with a weekly cadence

• Official monthly reporting should be automated and standardized after the books close

Without getting clear on the report’s purpose, you’ll find that FP&A teams will add or adjust the report for just in case situations.

Maybe one time 3 years ago a senior leader asked what was driving the revenue trend, so someone added a new tab to the flash P&L report that now gets updated every month with an additional data source but is unused.

Not ideal. The report is no longer optimized for the original intent

In summary:

In case you missed it - there’s a single indicator that tells you that something is broken with your report:

the report is no longer optimized for the original intent

Focus on each report having 1 audience and 1 purpose and you’ll have a powerful reporting suite

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