Instituting a financial review process & meeting can be a key driver in the continued growth and success of your business. These meetings represent an opportunity for both reflection of past results to see what worked/did not work and a forum for leadership to focus and plan for the future. Organizations need to use this time effectively in order to keep people invested and to have positive results in these meetings.
General Best Practices:
- Schedule the meeting for a fixed time each month. Doing so sets clear deadlines for the finance team to have the data prepared and sets the routine for the executive team so that they can try to avoid conflicts for that specific time. The time should be long enough after month-end to have complete data but soon enough as to be relevant.
- Circulate the data prior to the meeting. Whether it is a full financial report, a summary slide deck or minutes, circulate the data and agenda at least a day prior to the meeting so all parties have a chance to review and prepare questions. The advance data will help give better insights and also can assist in keeping the meeting moving.
- Consider inviting outside parties. Similar to a board meeting for a corporation or non-profit, consider inviting outside advisors (accountants, consultants, lawyers, etc.) to these meetings from time-to-time to have an outside voice available. It can assist in seeing things from a different view.
- Use each meeting as a chance to improve the next meeting. The key players in presenting the meeting, such as the accounting and finance team, should take time afterward to consider what parts of the meeting were successful, which could use improvement and potential areas to explore. Use each prior meeting to further refine and change each subsequent meeting organically to help the organization meet its goals.
- Less can be more. Use the time you have effectively and do not present so much information that the attendees are overwhelmed.
Data Presentation Tips:
- Use an executive summary. Early in the presentation or slide deck, try to have a brief, short summary of the key takeaways from the meeting, even before you present them. It can help similarly to a topic sentence in an essay to keep your presentation focused, get the key point in the attendees’ mind early and a quick summary to refer back to after the meeting has ended.
- Make the presentation fit your audience. The information that would be presented to a finance, accounting or HR only meeting will likely be more granular and technical than that to an executive team. Try to think about what items in advance are of key importance to the stakeholders and tailor the presentation to hit these points early and often.
- Be mindful of signal/noise. Similar to knowing your audience, your presentation and data should have enough information to be helpful, but not so much as to lose the message in the details. The details should be available if necessary, but not the focus as sometimes this deep dive can curtail the bigger picture.
Financial Review Best Practices:
- Identify and highlight the key metrics. Key performance indicators are great quick review items to include in the executive summary and items to focus on during the presentation. These can include the gross margin on sales, cost per unit or unit of service, percentage of sales costs, etc.
- Compare to prior periods. Seeing both how the business has grown against absolute and ratio numbers over time can help to spot trends and weaknesses in the business. Used in combination with the key metrics, it can help to identify major areas for improvement. Sales have increased over the past 6 months but the bottom line has stayed flat – seeing the month to month margins, cost per unit and sales volume can help to identify if the sales teams performance may be lagging, even with increased sales.
- Compare to expected results. Organizations should have a budget and expected results for the year. Comparing against the expectations can help find areas that are now growing as expected or costs that have increased and allow for the company to address quickly.
Meetings have a reputation for being ineffective. However, a financial review meeting can be a strong tool to help businesses of all sizes to understand their finances better, identify strengths & weaknesses and help fuel growth.
Edward McWilliams, CPA
Ed is a Partner in the firm’s tax and business advisory practice focusing on providing services to middle market private companies across different industries as well as to early stage startups. Ed has over a decade of experience providing tax and business consulting services to these companies of different sizes and across different industries, bringing a broad and diverse knowledge base and strategic solutions to the many complex issues that businesses face.