Reporting series – Post 4: The action plan

So after you have structured your reports for easy understandability, made them more visually appealing, and added in some non-financial data to the financial reports, the key output needs to be an action plan.

The action plan can be anything from continuing the excellent work being done if sales are better than expected, to a remedial plan on how to get back on target if they are below expectations, to a strategic move into or out of a product, to a strategic expense reduction program, or acquisition.

In most cases the action plan aims to provide growth for the business. As a finance professional, I always aimed to produce an action plan out of what I could see whenever I attended a management meeting involving the review of financial reports. Or at least develop insights to allow others to make an action plan.

The great thing about an action plan is it involves people. My view is that the financial statements are a picture of the life of a business over a certain period, or at a certain point in time. It shows a certain number of customers buying a certain amount of product and a certain number of staff and resources successfully carrying out  what is needed to deliver those products to those customers – all on one page, so to speak. It may be a set of numbers on the page but each one of those numbers represents somebody doing something in real life.

And this is where the action plan comes into play. Every single number that is worse than target can be improved by one or more people improving performance. Every single number that is ahead of target can be learned from by mirroring the performance of those that generated the result.

My father’s view, which I tend to agree with, is that “everyone just wants to succeed”. What an action plan can do is give people clarity, and enable the removal of road-blocks, so they can.