Cutting the Clutter: See the Benefits One Company Found in Moving the Most Important Financial Information to the First Few Pages of Monthly Operations Reports

But not everyone at Solix Inc., the New Jersey company where Kenner is CFO, knew what the numbers meant. And among the finance staff, not everyone involved in the creation of those monthly operations reports, which had grown to 20 pages, considered the process routine. About a year ago, after a suggestion by a new board member, also a CPA, Kenner made the move to cut the clutter in the monthly Excel document that was emailed to the board and about 30 other stakeholders. Instead of a large, numbers-heavy document, Solix delivers a streamlined monthly report that cuts to the chase and lessens confusion for board members and others who aren't trained in finance. The number of pages has decreased by about half, but so too has the number of "important" pages. Now, a few pages of key information in an easier-to-read format are delivered to inboxes. Instead of calling up a PDF, seeing it's 20 pages, and thinking, "I don't have time for this," board members and department heads are more engaged in scanning over the key numbers in the report.  In the past, the operations reports included the most recent month's revenue versus budget on one page, the year-to-date revenue versus budget on another page, and then separate pages for current month versus previous year's month and current year to date versus previous year to date. That's a lot of flipping back and forth through a printout or scrolling through the tabs of an Excel document. Those four pages have been trimmed to two. Now, data for July 2013 actual, July 2013 budgeted, and July 2012 actual can be viewed on one page, the same for 2013 year to date, 2013 year-to-date budgeted, and 2012 year to date. The consolidated operations report has three key pages after the consolidated balance sheet. The first is an easier-to-read income statement. In addition to having rows for revenue, operating profit, and net income, the statement includes contribution as a percentage of revenue, and operating profit as a percentage of revenue. "We're able to compare both the amount and the volume of the contribution, in addition to a comparison in percentage," Kenner said. The next two pages are for month and year comparative results with the headline "" They have comparisons to actual numbers, budgeted numbers, and prior-period numbers. Those who crave the details can still look at the full report, which Kenner says has been cut to about 10 pages. For the rest, the first four pages beyond the cover tend to do the trick. Solix still creates full annual reports for shareholders and quarterly reports for its bank. "We're giving the traditional GAAP financial statements, with balance sheet, cash flow, P&L, stockholders' equity, footnotes," Kenner said. The June 2012 report for the board was 20 pages. One from this past summer was 11 pages. THE ADVANTAGES Less time on the monthly report, more on forward-looking analysis. The finance staff is "asking more questions about the numbers," Kenner said. They're also happier about the change in emphasis--e.g., the elimination of one specific segment report that a Solix executive had requested. "My staff was just thrilled," she said. "They told me, 'That [segment] report was such a pare to create. It's always got rounding errors, and you have to cross-reference it to others.' It was a nightmare to create. You don't even know what kind of machinations they were going through to create these reports. It looked simple, but they said, 'No, it's really awful.'" Greater accuracy. …

Field of study: Business