The very first time I presented financial statements to the church board as treasurer, an argument started over the price of copies. I think our budget was maybe $250,000, and church attendance had plateaued, and the main leaders of the church were focusing copies. I knew this was a problem so I declared, “This is the last time you will get detailed financial reports. Next month you’ll get summarized versions.” Immediately I received pushback from a long-time board member who was worried that I would be hiding details from the board.
Thankfully Tom Freier was serving as my finance committee chair and backed me up. I learned from Tom that too much detail actually blinds most people from seeing the important numbers. When there is too much details, we get overloaded and overwhelmed and only focus on the couple of things we understand instead of the big picture.
Years later, I’ve fought this battle over and over again. I usually aim for a one-page balance sheet and a one-page income statement. It didn’t occur to me until this year that I’m still including too much details. I have recently started using an executive summary.
What should an executive summary for a financial report include? Here’s some ideas:
- Graphs: I might be biased, but it seems like the world is just better with more graphs. They are numbers in picture form and a lot easier for people to understand.
- Five or Fewer Highlights: I like to concisely state some of the highlights from the previous period. It seems like five is about the maximum that most people will read. Beyond five, you’re wasting ink.
- Seek Feedback: Not all the time, but at least annually ask about what needs to be improved in the reports. What can be dropped or should be added. Afterall, the main purpose of your reports is to help those receiving the reports.
In the video, I give you an overview of my template which is linked below.
- Executive Summary Template: https://jctaccounting.com/wp-content/uploads/2022/10/finance_committee_report.xlsx
- DWU: https://www.dwu.edu/
- JCT Accounting: https://jctaccounting.com/