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:

Think strategically – in essence, the key metrics will the ones which support strategy. This may be cost, revenues or a non-financial measure
Focus on accountability – limit the feedback to factors which are controllable by managers/business units
Be clear – keep it very simple, use only a few key metrics
No surprises – keep the information useful, less detailed and relevant to the manager/business unit
Be clear – explain figures to non-finance people, highlight how finance can help managers
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”
Two-way process – finance can also be the receiver of information. Reports/metrics can be challenged by operational managers
Persevere – it may take some time for finance’s metric to be accepted by some managers/business units. But persevere