Getting Financial Reports You Can Use

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Maybe the controller or CFO in your company is suspicious of sharing financial information. The accounting staff can't seem to speed up the monthly close or produce any kind of financials before month's end. When the financials do arrive, they're page after page of densely packed numbers, not designed for easy reading. Sound familiar? Learn how financial professionals at two companies took the lead in turning their departments around:

From Controllers to Communicators

"Before we started sharing financial information with employees, our department was merely a collector and controller of information," says Carol O'Brien, manager of tax and financial reporting for Paragon Biomedical Inc. "To make it work, we had to become a communicator of information." O'Brien's department homed in on three areas:

  • Changing language. "We moved away from technical accounting jargon and adopted a simpler language," says O'Brien. "We defined very basic terms and helped people understand them." For example, "we helped people understand what profit was by breaking it into the difference between sales and spending. Once they knew how they could affect sales and spending, they knew how they could affect profit."
  • Changing the communications system. Paragon's finance department used to create lengthy technical reports that nobody ever used. Since implementing its own brand of open-book management, the department provides everybody with a condensed income statement and two-page explanation of the numbers, complete with user-friendly discussions of significant variances.
  • Creating a learning environment. The company plays games around reducing line item expenses such as FedEx costs. Once a month, employees at headquarters play Jeopardy!, with all the answers and questions related to that month's financials. "We try to focus on learning as much as we can in teams. People are far less intimidated in a group setting."

* * *

From Data Compilers to Info Analyzers

In the past, says financial systems director Gary Murphy of PSS/World Medical, PSS's financial accounting department sent reports out to the company's branches 45 days after month's end. "A report was a hundred pages of green bar. It was only sorted one way." Then the department renamed itself the A-Team and created a whole new system in only two months, according to intranet development leader David Ramsey. Today, PSS's A-Team does the following:

  • Preliminary financials go to the company's 61 branches 10 days after month's end. Branch managers review them and make corrections. Finals go out on the 15th of every month.
  • The financials go out over an intranet system known as the PSS A-Team.Net. Branch managers pull down the data, which comes to them in the form of Excel spreadsheets, then print it and post it. The new electronic financials show month, quarter-to-date, and year-to-date performance, with columns for actual, budget, and variance. They show rolling averages on five major line items. They can be collapsed, expanded, or re-sorted however the manager might wish.
  • The department also provides comparative information for all of the company's branches, rating them against each other on the basis of ratios. Result: Some healthy competition, with poorer-performing branches working hard to bring their numbers up. Says Murphy: "Nobody wants to be #61."

Copyright © 1998 Open-Book Management Inc.

Last updated: Jun 1, 1998




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