20 Ways To Effectively Communicate Financial Reports To Stakeholders


The development and communication of accurate and insightful financial reports and analyses are important for businesses and organizations to thrive. As stakeholders increasingly seek transparency and clarity, finding effective approaches to relay financial information has become a crucial challenge.

Below, 20 Forbes Finance Council members explore several key approaches that companies can adopt to ensure their financial reports not only meet regulatory requirements but also effectively communicate financial performance, risks and opportunities to stakeholders. By understanding and implementing these strategies, organizations can strengthen their relationships with investors, clients and other stakeholders, developing a deeper level of trust and informed decision-making.

1. Focus On KPIs

Identify your key performance indicators (KPIs). Next, determine what financial reports or ratios are needed to support your KPIs. Clearly analyze and interpret the findings of the reports or ratios. Then deliver a concise summary describing the analysis and whether or not adjustments need to be considered. Finally, record the data so you can consistently measure various periods of analysis. – Christopher Foder, CExP, First Financial Group – Meridian Financial Associates

2. Analyze Needs

I suggest starting with a fitment analysis to identify if current reports meet stakeholders’ needs. Define the desired state by addressing issues like data quality, timeliness, comprehensiveness or ease of access. Prototype the updated report with stakeholders, then prioritize rapid implementation, validation and rollout. Then in a fresh setting, begin with a needs analysis. – Mahesh Raja, Wipro

3. Stick To What Is Important

Those responsible for the preparation and presentation of financial reports must consider that not everyone will understand the information being presented. Dashboards are great for board reporting; however, too much analysis can be overwhelming. Drill down on those things that are important to the audience and make sure that any major changes in the financials are discussed in detail. – Shannan Herbert, Stratyfy

4. Translate Data

One approach is to focus on transparency, materiality and customization. Avoiding complex jargon and technical terms—tailoring to different stakeholders’ specific needs and interests. It is essential to provide meaningful analysis alongside the financial reports. Data translation via identified trends provides insights that help stakeholders make informed decisions. – Cynthia Dalagelis, Amalgamated Bank

Forbes Finance Council is an invitation-only organization for executives in successful accounting, financial planning and wealth management firms. Do I qualify?

5. Contextualize Information

Contextualizing financial information is important. Simply presenting numbers without providing the necessary context can lead to misinterpretation and confusion. Provide detailed explanations, support, transparency and insights into factors that have influenced financial results, such as market trends, industry dynamics and internal business strategies for informed stakeholder decision-making. – Peter Goldstein, Exchange Listing LLC

6. Develop An Internal Communication Strategy

Don’t forget your internal stakeholders. Developing a strong internal communication strategy around financials can help employees understand how their work connects to the broader business’ performance and priorities. Enable your team to connect the dots to business outcomes and your team will outperform. If your internal team is unable to, it becomes exponentially more difficult to prioritize. – Matt Bochenek, Avant

7. Create A Clear And Easy To Understand Report

Reports should be clear, concise and easy to understand. This can be achieved by using plain language, simple formatting and relevant visuals. It’s important to tailor the message to the specific audience. For example, for a board of directors, the focus may be on high-level financial results and trends, whereas for investors, the focus may be on detailed financial performance metrics. – JD Morris, RHC 21 LLC (a SPE Fund) with family of Special Purpose Entities (SPE or SPV)

8. Be Transparent

Embrace transparency and accountability by including a clear breakdown of assumptions, methodologies and key drivers used in financial analysis. This provides stakeholders with a deeper understanding of the underlying factors influencing the financial reports, instilling confidence and fostering trust in the accuracy and integrity of the analysis. – Michael Foguth, Foguth Financial Group

9. Create Stakeholder-Centric Reports

Start from the end. Ask yourself what information and reporting are required and relevant but also desired by stakeholders. Then work backward to produce assets. It’s easy to fall into the trap of cookie-cutter reporting when instead there’s a value-added opportunity to transparently communicate and report information that is impactful to stakeholders. Remember, it’s ultimately storytelling with numbers. – Zack Cook, Keyfactor

10. Employ Support To Communicate The Information

This is the key answer: Many stakeholders do not know how to read financial statements and other essential documents, therefore they need aids and tailored reports. These are best served by professionals who interpret what the standard financial documents say in a friendly and digestible way. Solely giving them definitions for terms is not enough. – Guadalupe Rodriguez, Talipot Holding

11. Highlight Target Metrics

Most stakeholders care about a small list of meaningful metrics, not all the metrics you have. Target metrics that matter. Think about three to five of the most important points in your report or analysis and the message you want stakeholders to walk away with, then highlight that. – Michelle DeBella, JumpCloud

12. Apply Storytelling

Combine data visualization and storytelling techniques. This approach helps present complex financial data in a visually appealing, intuitive and engaging manner. This makes it easier for stakeholders to understand, digest and retain the information. Organizations can improve stakeholder engagement, understanding and decision-making, leading to more productive and informed discussions. – Neil Anders, Trusted Rate, Inc.

13. Get The Experts To Report Finances

Proper financial reporting is an important aspect of running a business. This is why business leaders should rely on professionals with the proper expertise to manage these matters. The top leaders don’t seek domestic only options but instead work with the best advisors in the world, such as trust companies in the Cook Islands, investment advisors from Switzerland and CPAs or attorneys in the United States. – Blake Harris, Blake Harris Law

14. Align Strategically

Determine the key messages you want to convey through the financial reports and analysis. These messages should be aligned with your business strategy and objectives. Identify the critical financial metrics and trends that are relevant to your stakeholders. Then, provide context, explaining the financial data in context with business operations, industry trends and market conditions. – Justin Goodbread, WealthSource Partners, LLC

15. Use Benchmark Data And Comparisons

Utilizing benchmarking data and industry comparisons are great ways to provide better context when translating data. Providing measurable context will make accurate decision-making easier and give creditability to the company’s cash flow forecasting and overall financial health. Make sure to provide visual aids like a progress dashboard to help make your results clear. – Nick Chandi, ForwardAI

16. Be Honest About Your Reporting

Honesty and clarity go a long way in presenting financials. Explain both the good and the bad, as well as the why behind each. For the bad explain what your plans are to mitigate it and don’t sugarcoat things when they are bad. When you show honesty and a game plan, you will gain the trust of stakeholders. – Aaron Spool, Eventus Advisory Group, LLC

17. Practice The Three C’s

The three C’s—consistent, concise and cadence—are all vital for effective financial reporting. A concise dashboard with a consistent format enables timely decision-making, comparability and streamlined communication. Reporting cadence keeps the information up-to-date, while a consistent dashboard promotes transparency, trust and collaboration. – Matthew Barbieri, Wiss

18. Utilize Supporting Narratives

Create supporting narratives for the financial statements. Having this as supplemental information, managers will be able to explain the financial results, trends and significant events that may have impacted the organization’s performance. These narratives can provide context and help stakeholders better understand financial information. – Sean Frank, Cloud Equity Group

19. Present Data Visually

Utilizing data visualization tools. This makes complex data easily understandable, helping stakeholders digest information and enabling quicker decision-making. – Matt Johnner, BankLabs

20. Keep Attention With Interaction

Incorporating interactive elements like quizzes, simulations or gamification can further enhance stakeholder engagement and knowledge retention. By leveraging these innovative technologies, organizations can transform the traditional approach to financial reporting, making it more interactive, memorable and impactful for stakeholders. – Jose Rodriguez, Got Credit?


Leave a Reply

Your email address will not be published. Required fields are marked *