Transparency has become a hot topic for all of our clients Not for Profit and For Profit alike. But, what exactly is transparency? The definition of transparent from Merriam Webster online is: Characterized by visibility or accessibility of information especially concerning business practices.
In laymens terms, most people desire financial data that is easily understood and readily accessible. This seems pretty straight forward. However, putting the concept of transparency into practice is not quite as easy as it sounds. We have a new client who is very interested in financial reporting that is transparent and we spoke to three C level personnel the CEO, CFO and COO in order to obtain their financial reporting desires for their transparent environment. Here is what we learned:
CEO We want to provide financial statements with KPIs and BI tools used as a primary communication tool. We do NOT want to provide too much detail as I dont want to answer a bunch of questions pertaining to where we are spending our money. For example, I dont mind them knowing what our total Travel & Entertainment expenses are but I dont want them to see how much the Company pays for my membership to the Country Club.
CFO In order to be totally transparent, we must provide detail as to every single transaction that takes place within our environment. We should show who our customers are so that everyone knows we arent just generating revenue numbers from related parties, etc. If we are spending $10,000 a year on a Country Club membership for our CEO, that information should be presented and shown. In a world of transparency, if we are afraid to show it than we probably shouldnt be doing it.
COO I want people to have access to data pertaining to workforce productivity, operational investments that are being made and the ROI that accompanies those investments. I really dont have an opinion as to what financial information we show or the level of detail that we provide as quite frankly, I cant control those costs so I dont worry about them.
The determination was made within this Company that one solution would NOT solve the transparency consumption needs for the consumers of the data. Therefore, it was imperative that a Financial Management and Reporting system be implemented that can readily serve up data in multiple formats. Microsoft Dynamics GP and the accompanying reporting tools provided the necessary flexibility and scalability to solve this challenge. Maybe its right for your organization also?