A CFO’s report to the board needs to be meaty enough to describe the full picture of the business’ finances, but concise enough for busy people to skim without difficulty. Well executed, this document can set the focus for a board meeting, providing the bones for a productive conversation on where the business is headed.
Conversely, an ill-considered report might steer the same conversation in the wrong direction, either by encouraging your leadership team to focus on an irrelevant issue, or drowning them in details.
Here are a few guiding principles to help you approach this task with a tactical mindset, and an example CFO report to adapt to your own needs.
What's included in a CFO report?
A CFO’s monthly report should include all the high-level information the board needs to know in order to make decisions about the company’s strategy and governance. Reports typically include updates on the organization’s income and expenses, as well as the key performance indicators most relevant to your business, set in context.
Monthly board reports are typically more backwards looking than predictive, and describe how your business performed against expectations you set during the previous period.
They should also flag any risks on the horizon, and call out any emerging patterns in the company’s financial performance.
How do you write a CFO report?
When it comes to writing your CFO report, here’s a few hints and best practices to remember. You should:
- Keep it simple—this is a high-level update. Providing too many fine details of the company's finances can overwhelm your leadership team, and distract them from the real story, whatever that is right now. When writing your executive summary and comments, remember that not all formal documents need to be academic in tone. In report writing, clarity beats complex.
- Break it up—to make this easier for your board members to take in at a glance, try to balance tables of numbers with data visualizations and short paragraphs about your observations.
- Play to the crowd—the perfect report is in the eye of the beholder. Ask your board members which metrics they’d like to be included, and take note of any factors they often ask about that aren’t usually in your report.
- Write for the least financially literate of the group—chances are, not all of your board members are finance experts. Some may be bringing expertise from other fields, such as business or academia. Avoid financial jargon and ensure that your report is understandable to those who don’t have an accounting background.
- Be consistent—keep the format of your report similar between months, so that your board can easily compare time periods and refer back. Ensure that older editions of the report are stored somewhere you can all reference easily.
- Send it in advance—ideally, your board should have the report in their hands 5-7 days before you meet them to discuss it. To make your preparation for the meeting easier, you can even ask them to send their initial questions ahead of time.
- Automate what you can—though your analysis of the business’ financial patterns will require significant expertise, compiling the data for your CFO report should be relatively easy. Thanks to the rise of CFO software, most finance leaders can access the metrics they need at the click of a button—and have easy ways to create data visualizations too.
CFO Report Example 1
This report template is intended for the use of a busy software-as-a-service startup. As such, there are a few CFO KPIs that will only be relevant in this context—from metrics like runway that only cash-strapped young businesses must worry about, to those related to the subscription model.
CFO Report example 2
This report template is intended for the use of a CFO at a small to medium-sized business. It is more pared down and only contains essential metrics related to a business’ budget and balance sheet.
Reports set your business’ financial narrative
Writing a finance report is a kind of storytelling exercise. Despite the saying, the numbers don’t speak for themselves—otherwise the role of a CFO would be far easier and less prestigious than it is. It’s up to you to interpret the themes behind the data, and point your board’s attention to key problems and opportunities.
Perhaps the best advice for telling a consistent story is not to overthink it: Once you’ve found a report format that covers the bases you need to cover and sparks useful questions—you can reuse the template, with slight variations, every month.
Your board will know what to expect, which will build up their trust in your assessment—and you won’t have to reinvent the wheel every time.
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