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 laymen’s 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 KPI’s and BI tools used as a primary communication tool. We do NOT want to provide too much detail – as I don’t want to answer a bunch of questions pertaining to where we are spending our money. For example, I don’t mind them knowing what our total Travel & Entertainment expenses are – but I don’t 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 aren’t 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 shouldn’t 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 don’t have an opinion as to what financial information we show – or the level of detail that we provide – as quite frankly, I can’t control those costs – so I don’t 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 it’s right for your organization also?