Is your financial statement template so dense that even you have trouble reading it through without going cross-eyed?
Do you find that when you present your findings to stakeholders that there’s dead air, and no one is engaged or asking questions?
We speak the language of numbers – but not every stakeholder does. And even those of us who wrangle numbers for a living can get lost in the weeds if a report isn’t structured to hook the audience. In order for your numbers to command attention and speak for themselves, it may be time to dig deep back to your high school English classes and refocus your reporting from a storytelling lens.
No need to shudder; the aim isn’t to write the great American novel. Applying a storytelling mindset means thinking back to your lessons on story structure – the hero who battles against all the odds to achieve success, and a cliffhanger glimpse into the next leg of their journey.
Applying storytelling concepts to financials makes them memorable, emphasizes the significant metrics tailored to your audience’s needs upfront and center, and tells the story of your growth, utilizing both KPIs and additional context.
Source: Staying Alive UK
A crash course in financial storytelling
Storytelling in Finance isn’t a passing trend — it’s a highly desired skill among finance professionals. 81% of surveyed CFOs in the Accenture CFO report From Bottom Line to Front Line believe that data storytelling is an essential skill for financial professionals today to help support strategic insight.
Successful accounting is one part of finance and one part of narrative finesse.
Use fifty-cent words
We love this Warren Buffett quote that he wrote as the preface to the USEC Plain English Handbook:
“I pretend that I’m talking to my sisters. I have no trouble picturing them: though highly intelligent, they are not experts in accounting or finance. They will understand plain English, but jargon may puzzle them. To succeed, I don’t need to be Shakespeare; I must, though, have a sincere desire to inform.”
He then adds four key points that are the essence of writing in plain language:
- Keep your reader in mind
- Use clear, simple language
- Avoid technical jargon and gobbledygook
- Write to inform not to impress
Keep in mind that timeless quote from the American spinner-of-yarns, Mark Twain: “Don’t use a five-dollar word when a fifty-cent word will do.”
Write to your audience
That first point on Buffet’s list is particularly important: Who will be reading or listening to this report? If that reader takes away only a few key points from your report, what points would you want to hammer home?
Whatever juicy metrics you have to share with your audience should be featured right up front as a hook. Not only will this capture their attention, but it then dangles the carrot of further excitement to come that will keep them reading or listening.
The hero’s journey
When you are structuring your report, CFO of Vena Solutions, Darrell Cox, suggests thinking of your company as a character in a storybook:
“A company is like a character in a book, going through its own set of life-changing experiences. Part of my role is to pitch Vena’s story to potential new investors. The idea is to engage them in the story of our business’ development, showing its full potential and how they can play a role in realizing it.”
Your company may be the character, but your stakeholders should always be framed as the heroes (or potential heroes). If you frame your story well, people will get excited to be a part of the story you’re crafting.
A good story starts with a hook (important success metrics), then explains the various plot points and challenges that lead the hero towards the climax, which is where you are today. Your conclusion should express how the insights of the present translate into foresight for the future.
Provide meaningful context
It’s always important to consider where your audience might require additional context to get a full picture of finances. Sometimes this is through additional metrics, but sometimes you might need to elaborate on a situation to be fully transparent.
Examples of information you might need to relate include points that tie back to company culture, local or global challenges (environmental impacts, supply chain shortages, etc.), or anecdotes that show how money is allocated to build trust among shareholders.
Let your numbers speak for themselves
When you are structuring a financial statement, you need to ensure you are including the metrics that will be able to tell your story without having to be too verbose fully. Many writers of financial statements only utilize information from the General Ledger, but this may not be enough to paint the bigger picture. Sometimes you may want to include data from the Sub-Ledgers as well.
For those who don’t know the distinction:
- A general ledger provides a master record for accounts receivable, accounts payable, cash management, bank management, and fixed assets. It amalgamates all the transactions from the sub-ledgers.
- A sub-ledger is a full record of the individual transactions that make up the numbers in the general ledger.
While the general ledger provides a meaningful overview of financial growth, sometimes it can be valuable to dig deeper into the sub-ledger metrics for additional context.
Don’t forget graphs and charts
Data visualization tools allow you to present your numbers in meaningful graphs and charts that will enable stakeholders to understand KPIs at a glance. Whether in a deck or a PDF, it’s worth having a designer look over your presentation or report to ensure it makes the maximum impact from a visual perspective.