Are your reports useful?

Soooo tempting to try this, isn't it?

As a preparer of reports I was often convinced that I was wasting my time.   This was because most of the recipients of the report either didn't read the report or were only looking for a couple of key numbers.

Over time, as I started each new job, one of the first things I'd do was to review the reports issued by the finance team.  As a rule,  this review cut out or modified many of the reports produced and freed up significant amounts of team time. (I'll write about the process I used in a separate article).

The key to this process was making sure that the report was useful to the recipients, and then consolidating, modifying or dropping reports as required.

So, what makes a report useful?




At the outset, remember that this blog is about PRACTICAL reporting.  I'm not going to cover all the points in reporting theory (you can do that - try googling "effective reporting" or "best business reports" or something along those lines) but I am going to try and distil what I've found over the last 20 years.

Also, we need to ensure that we are using the same definition of "usefulness".  All reports will contain information (information is simply formatted and organised data).  So, I don't consider a report useful simply because it contains information.

No, for me a useful report has to trigger actions (or a decision).  These actions can be as simple as a discussion or as complex as a company restructuring.

The actions triggered should (obviously!) be constructive - ie they should advance the growth and prospects of the company.

So, what makes a useful report?

1) Use the right type of Report

In my experience, reports fall into two broad categories.

a)  Discussion Reports
b)  Diary Reports

Discussion Reports are generally short (say 1 page), with highly summarised information (often in graphical form) which are produced very quickly after an event (eg Flash Reports, Dashboards).  Because they don't contain details, they are excellent at promoting discussions.  

Diary Reports are generally longer, contain more detailed information, often with a detailed commentary.  Given the size and number of people involved (usually due to the requirement for detailed commentary) they often take longer to produce.

Which one is appropriate entirely depends on what actions you are trying to generate and what time horizon you are looking at.

For example, producing a diary style monthly report on work day 16 (or later) is generally going to be, ummmm...., less useful .  By the time the report is produced (and more importantly read and understood) the action triggered will probably be too late (as a new month has already passed).

Generally, I suggest diary style reports should be used very infrequently.  There are very few circumstances where they add value.


2)  Always show a future target

Most reports are backward looking and inadvertently tend to discourage "the right conversations".  For example, many financial month end reports have month, year to date and last year values, often compared to budget or forecasts.  Explanations in these reports tend to focus on what has happened so far and why there is a variance in the month or year to date.

It is always useful to understand how we got to where we are, but it is much more useful to discuss how to get to where we are going.

So, as a minimum, in a month end financial report, always show the full year forecast target....that tends to have a very focussing effect.


3)  Make it timely

All teams make decisions every day.  And many of those decisions need to be made (and will be made) even if the team doesn't have all the information they need.  So, when assessing the usefulness of a report a key consideration is when the report is produced.

Generally, the greater the time taken to produce a report the less useful it is.  If you have a choice between higher levels of detail (or accuracy) or producing the report faster...ALWAYS produce the report faster.

4)  Perfect accuracy is not required

Yes, all reports produced should be 100% accurate.  

Now that we have that out of the way, let's be practical.  It is FAR more important that the report that goes out the door on time and MOSTLY accurate.

Let's be clear - I'm not talking about sending out a report that is wrong.  What I'm saying is that holding the report back in order to fine tune a couple of variances, or post that last journal for $1500 is wrong.

Remember, if you are reporting financial information the chances are VERY high that you have accrued costs during your month end.  And accruals are just educated guesses.  Chances are, they'll turn out different.  Also, provisions, exchange rates, inventory values etc all affect the accuracy of your numbers.

Given that, aim for a realistic level of accuracy.

5)  Report numbers and targets that actually matter

This is so obvious I almost forgot to mention it.  However, it really does make a difference.  As a "useful" report is going to trigger some form of action, it would of course be great if that action was helping to achieve the company objective.

It is essential that every report guides the actions taken towards improving performance in ways that make the most difference to the company.  Metrics to measure performance can and should change as a company develops.

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So, what do you think?  Are there other things which go into making a report useful?