The Rise of the Non-Financial Report

The Rise of the Non-Financial Report

May 19, 2016 Evan Webster  
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If CFOs and their teams only look inward, their perspective won’t offer what senior leaders really need.

The phrase “bottom line” and “finance” often seem to go hand-in-hand, but smart CFOs and their teams are increasingly beginning to realize that making sense of all those other lines is really important, too

A great article on Finance Director recently described annual reports that are taking into account non-financial measures. HR rules may seem too internal to be of interest to investors and senior executives, for example, but they can contribute directly to corporate performance. The same goes for a firm’s research capabilities, changes in the customer base and beyond. A non-financial report brings these things together in a way that’s really meaningful, the article suggested:

The financials may tell you how much money the company made, but not necessarily how it makes money. And more importantly, whether the current year earnings provide a long term sustainable proposition for value creation.

The other great takeaway is that CFOs shouldn’t necessarily be using data to sway the organization, but to guide strategic thinking by marrying their traditional knowledge of resources with the operational drivers that determine how well a company works.

All this may seem far removed from the reality of what finance departments are going through today. How do you start writing a non-financial report if you don’t have the right information?

In a new report called “The Transformative Controller: Adding Value, Insight, and a Bridge to the Future,” KPMG suggested that there is a strong correlation between companies that make smart IT investments and those who have deeper insight into the things they need to know and share with others.

“Some 73 percent of controllers say that a technology-driven financial reporting audit helps them assess comparative company performance in their industry,” a story on CPA Practice Advisor summing up the research said. “Additionally, more than one-third of respondents say a technology-driven audit improves speed, helps to flag high-risk areas, improves quality of work, and allows the auditor to perform deeper analysis.”

Controllers are just one part of the finance team, of course, but you get the idea: Use technology not only to think through the things senior leaders have expected to hear from the CFO’s office, but things they might never have expected to hear. It doesn’t have to be all good news: it just has to be news they can really use and act on.


The post The Rise of the Non-Financial Report appeared first on Blog | Vena Voice | Vena Solutions.

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