How Do You Handle Financial Reporting to Stakeholders or Investors?
When it comes to sharing financial information with stakeholders and investors, clarity and understanding are key. We’ve gathered insights from founders and directors to offer you four best practices. From tailoring information for all audience levels to avoiding jargon in financial explanations, these professionals provide valuable strategies for effective communication.
- Tailor Information for All Audience Levels
- Present Clear, Concise Financial Data
- Use Visual Aids to Simplify Concepts
- Avoid Jargon in Financial Explanations
Tailor Information for All Audience Levels
What you share needs to be tailored to be understood by the most uninformed members of your target audience. The biggest hurdle to this is overly complex information.
Ask yourself, would the most uninformed member of my target audience understand what I’ve written? If not, you have two choices:
1. Simplify it.
2. Remove it.
Jack Grundy
Founder, Ever New Digital
Present Clear, Concise Financial Data
Effectively communicating financial information requires a balance of clarity and simplicity. Rather than overwhelming stakeholders with complex data, it’s essential to present information clearly and concisely. Stick to key metrics and plain language to improve understanding and engagement. It also won’t hurt to use visuals such as charts and graphs to illustrate complex financial concepts in a more accessible way.
The goal is to ensure that stakeholders can grasp the financial implications of decisions and feel confident in the information presented.
Gary Hemming
Commercial Lending Director, ABC Finance Limited
Use Visual Aids to Simplify Concepts
You know what’s been a real game-changer for me when explaining financial stuff to stakeholders and investors? Visual aids. I’m talking about charts, graphs, and the like. They’ve made a huge difference.
I remember when I first started doing these presentations—everyone’s eyes would just glaze over. It was as if I were speaking a foreign language with all those numbers and jargon. It wasn’t great.
So, I decided to change things up. Instead of just spouting off growth percentages, I started using simple line graphs. The difference was night and day! People were nodding along, actually understanding what I was saying.
Visuals are awesome for breaking down complex stuff into easily digestible pieces. It’s like, boom—here’s where we are, here’s where we’re going. No need to slog through a bunch of numbers to get the point.
But it’s not just about making things look pretty. You’ve got to tell a story. Explain what these trends mean for the big picture. That way, you’re not just throwing data at people—you’re helping them see where the company’s headed.
This approach really helps build trust. People appreciate feeling like they genuinely understand the company’s finances. It’s like they’re in on the secret.
So yeah, my advice? Ditch the wall of text and go for visuals. Your stakeholders will love you for it!
James McDowell
Founder, Sparkle
Avoid Jargon in Financial Explanations
When you’re presenting financial data, it’s important to avoid jargon and technical terms that may be difficult for non-financial professionals to understand. Instead, focus on clearly explaining key concepts and metrics in a way that is easily digestible for all stakeholders.
For example, instead of saying “EBITDA,” you could explain it as “earnings before interest, taxes, depreciation, and amortization.’”
This simple change can make a big difference in ensuring that your audience fully comprehends the information being presented, leading to better decision-making and trust in your financial reporting.
Tom Molnar
Operations Manager, Fit Design
