Shane Rothenberger, MBA, Financial Consultant

949.422.0684; sprothenberger@aol.com; Irvine, CA Page 1

The purpose of this paper is to present a financial

reporting solution to enable finance/accounting

personnel to more effectively provide senior

management with concise, impactful and

actionable financial information. Armed with

this new and streamlined approach to financial

reporting, company leaders are able to make

critical, data-backed business decisions in a

timely manner.

THE PROBLEM

Far too often, senior management has issues and

complaints regarding the information they

receive from their accounting/finance team,

including:

Analysis or approach is too conservative

Too much data but too little actionable

information provided

Financial reports do not provide enough

depth or meaningful analysis

Issues with alignment of key data

providers and senior management with

respect to the “big picture”

This can result in a disconnect between the senior

management’s goals and what the company

financial reports portray. This can lead to

distrust between leadership and

accounting/finance along with overall misaligned

company objectives and goals.

Disconnects like these are a result of different

goals and approaches among business leaders

and the accounting/finance staff. Business

owners of entrepreneurial companies tend to

share similar core skills/attributes that drive their

success, such as:

Visionary

Macro manager

Customer-focused

Foundation builder

Passionate

Good people skills

Open-minded

Execution-focused

Most senior managers have reasonable financial

acumen. but many (especially in smaller

companies) concentrate their energy and focus

on sales, product/service development, and

production. These areas are, and should be, at

the forefront of a senior manager’s mind.

Utilizing Proper Financial Tools to Bridge the

Communication Gap Between Senior Management and

Accountants

Shane Rothenberger, MBA, Financial Consultant

949.422.0684; sprothenberger@aol.com; Irvine, CA Page 2

However, although senior managers recognize

and understand the need for quality and timely

financial information, the challenges in getting it

in the right format within the right timeframe

creates communication gaps between them and

their accounting/finance staff.

Senior managers are looking for any information

that will help them more effectively run their

companies. Since they are often pulled in many

directions, this information needs to be presented

and delivered in a “big-picture” format with

suggestions as to how to utilize the data points in

the most strategic sense.

How can we bridge the communication gap

between leaders and the accounting/finance team?

THE SOLUTION

The recommendations are as follows:

Utilize a consistent financial reporting

package that is reviewed monthly (at a

minimum)

Have the accounting staff generate a

“bird’s-eye-view” deck of 5-7 slides that

highlights the key financial results (e.g.,

revenue decreased by 10% while COGS

increased 7%) for the time period in

question

Provide recommendations in the deck

prepared for each financial review

meeting

Conduct formal monthly financial review

meeting

Engage a fractional CFO group to assist

internal accounting/finance team during

monthly financial review to facilitate

financial strategy recommendations

A financial review meeting should be conducted

within a week of closing the books. As part of

the financial review process, the meeting

architecture should include the following:

Formulating goals and objectives of

meeting

Establishing roles and expectations of each

participant

Cementing decisive action plan for each

participant along with timelines

The deck utilized during the meeting should

include the following:

Maximum of three points per topic (topic

example -- gross profit margin)

Graphical representation of points

Key takeaway (primary message)

highlighted per slide

Recommendations from accounting/finance

to leadership resulting from analysis

Suggested action plan

Presenter should allow viewers to absorb and

understand information and ask questions rather

than provide a narrative that is subsequently

read from slides.

THE TOOL

A financial model has been developed that

supports the above objectives, including “drill

downs” on any given metric during meetings.

Although this financial model automates

Shane Rothenberger, MBA, Financial Consultant

949.422.0684; sprothenberger@aol.com; Irvine, CA Page 3

Excel/QuickBooks integration, the model can also

be utilized with other accounting packages. With

the click of a button, the user can have an

automated financial reporting package to utilize

internally or present externally to shareholders,

bankers, investors, etc. The base package

includes, but is not limited to, the following:

Base Financial Model Components

Cover Page Cash Flow Statement

Business Overview Accounts Receivable Aging

Dashboards Accounts Payable Aging

Profit & Loss Statement Customer Ranking

Balance Sheet Notes & Disclosures

The proposed model is highly scalable. Possible

options to consider integrating include:

Forecast/Budget

Calendar/Timeline

Sales Funnel

Fixed Asset Schedule

Goals and Objectives

Consolidated Financials

Key Performance Indicators

Ratio and Variance Analysis

Contribution Margin Analysis

What is the value proposition with a fully

integrated reporting package?

Enhances internal and external reporting

Provides easily customized dashboards that

can provide a wide array of key financial

information such as profit margins by

product line, DSO, burn rate, liquidity

ratios, etc.

Comparative reports to evaluate trends,

seasonality, anomalies, variances, etc.

Customizable key performance indicators

(KPIs) that drive a particular business

Saves time and cost for internal

accounting/finance staff as it will greatly

reduce report development time

Easier to analyze the reporting package,

resulting in increased actionable

information

To summarize, regardless of company size, clear,

concise and actionable financial information is

critical to making sound decisions. Standard

financial reports are often insufficient to make

informed decisions because they do not provide

the capability to provide comparative analysis

across multiple years. Financial reports should

include a combination of both qualitative and

quantitative analysis along with comparability to

identify trending along with being aided by

various financial ratios. This will enable the

leaders of the company to make informed

decisions without having to spend significant

time getting bogged down with financial and

accounting details.