3 signs you shouldn't build that report

Too often in finance we build reporting at the request of senior leaders and those reports are underutilized.

An underutilized report is a waste of resources to build and maintain.

The main reason reports are underutilized:

The senior leader didn’t actually need a report.

What they needed instead was an ad hoc analysis.

Sometimes that analysis will evolve into regular reporting. But too often finance professionals jump straight to building a regular report that they are stuck updating.

It’s far easier to avoid building a report than it is to stop updating a report.

There are a few telltale signs that a report isn’t actually necessary (yet):

1. there is no clear vision for what is needed

2. there is no infrastructure for how to use the report

3. the metric(s) are new or have never been looked at before

Let’s dive into each one…

1) There is no clear vision for what is needed

If a senior leader comes to you with a half-baked idea for a report, the best thing you can do is ask lots of questions about the request to root out what is actually desired.

Ask what spurred the request and why the metrics are important.

Too often leaders will ask for what they know (a report) when they really need a 1-time analysis.

Offer to build an ad hoc analysis instead and see if it resonates with the requester. If you still sense that there is a weak use case for the report but it’s being asked for, then offer to update it as needed in the future.

2) There is no infrastructure for how to use the report

When onboarding the request ask “who will be looking at this report and what is the information going to be used for?”

It sounds silly to ask who will look at the report, but sometimes you will find that everyone expects someone else to look at the report.

However, the most common issue I find is that the requestor can’t explain what the report will be used for.

Here’s a few good use cases:
1. The report will be used to measure an internal control to ensure quality is in line with expectations
2. The report will be looked at every week to ensure the metrics are progressing towards our goal

Here’s a few poor use cases:
1. Once it’s built, we’ll better understand what we are looking for
2. We thought Finance would be the ones to look at it

Look out for signs that the request isn’t thought through.

3) The metrics are new or have never been looked at

Reports are best utilized for KPIs and metrics tied to financials or operational goals.

Sometimes business leaders want to evaluate an entirely new metric through the creation of a report.

What often happens to Finance is we build it, the business reacts and wants to change it, then that process keeps repeating until finally a solid metric definition is agreed upon.

If the metric has never been looked at before, then you should question if the next step is to build a report.

If the metric feels important to measure, then focus your energy first on defining the metric and exploring the pros/cons of the data - all before you create reporting infrastructure around it.

In Summary:

Getting your executive reporting correct will ensure everyone is focused on the metrics and outcomes that matter.

Keep it simple. Keep it targeted. Move the business towards action.

How will you take action on this?

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