Giving finance feedback to businesses – making it relevant

In the May 2011 edition of Financial Management (CIMA’s monthly journal), Richard Young writes a very nice summary of how managements accountants can provide good and relevant financial information and feedback to business units. I’ll summarise the main points below:

  1. Think strategically – in essence, the key metrics will the ones which support strategy. This may be cost, revenues or a non-financial measure
  2. Focus on accountability – limit the feedback to factors which are controllable by managers/business units
  3. Be clear – keep it very simple, use  only a few key metrics
  4. No surprises – keep the information useful, less detailed and relevant to the manager/business unit
  5. Be clear – explain figures to non-finance people, highlight how finance can help managers
  6. The big picture – target feedback so that no managers/units get enveloped in too much information. They need to able to see the “big picture”
  7. Two-way process – finance can also be the receiver of information. Reports/metrics can be challenged by operational managers
  8. Persevere – it may take some time for finance’s metric to be accepted by some managers/business units. But persevere

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About martinjquinn

I am an accounting academic, accountant and author based near Dublin, Ireland.

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