Beyond the numbers: How to improve clients’ financial analysis through storytelling

Beyond the numbers: How to improve clients’ financial analysis through storytelling

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In a recent BILL webinar, we dove into Storytelling through numbers in a remote world. This presentation is part of the Driving digital transformation series that BILL is leading this year.

Where do your final numbers really come from? 

We linear-minded accountants might tie all our numbers to journal entries or bank reconciliations. In reality, numbers are closely connected to the beliefs and actions of the owners and leaders of any organization.

The beliefs of your clients

Whether they’re aware of it or not, the beliefs of the owners and leaders you work with drive their behavior. As advisors, it’s essential to get to know our clients deeply enough to understand what they believe about their business, its value, and its purpose for existence.

For example, some business owners believe the business is there solely to serve and support their own personal lifestyle. If that is the case, you may see owners draining the cash from their company for personal trips, appliances, and cars.

How beliefs drive financial behaviors

From beliefs come our behaviors. Whatever we believe will find its way into how we act. So you’ll want to watch as you notice how your client pays their bills, collects their cash, or treats their team.

Behaviors are more noticeable than beliefs, but the two are intrinsically linked. Wise advisors will ask questions about the owners' actions to learn why they do what they do. It’s the beliefs we are genuinely interested in as advisors.

The proof is in the profit/loss statement 

Here is the result of our beliefs and behaviors. Numbers are simply the result of what owners and leaders believe about their companies.

A profit/loss statement is like truth serum. You can tell a lot about what someone believes by looking at the results of their numbers. Clients can’t hide things very easily when you are managing the accounting for a client or clearing their BILL inbox every week!

For example, we’re working with a client now that has a complete mess in their accounting records, and with consistent high turnover in the accounting department. This client does not believe they have time for training, nor do they value training in the accounting department. It’s showing up in their inability to tell if their projects are profitable or not. The owners are overwhelmed by their business, and they don’t think it’s important to find time to train.

How to have a positive impact on the profit funnel

A misunderstanding about the numbers we derive in our business is related to calculating profit and loss. We think we have control over our profit and loss, but what we really have control over is the beliefs and actions that result in the profit or loss.

Profit is simply the result of a math calculation: Revenue - Expense = Profit/(Loss).

Graphic illustrating the flow of revenue to pay expenses like Opex

Revenue comes into the funnel at the top, then some of that revenue covers things like Opex and COS expenses, payroll, rent, utilities, etc.

If you want to make a positive impact on your profit funnel, work on revenue, pricing, spending, and how strict or loose you are on how your funds leave your organization. Also, focus on the beliefs and behaviors the owners and leaders have about financial decisions.

As accounting advisors, the top parts of the funnel (revenue and expenses) are what we want to help our clients look at and then ask them why they do what they do. We want to get to the root of their beliefs and decisions. After revealing what those are, we can make fundamental changes in revenue creation and expenses, increasing profit and reducing loss.

4 practical principles for telling stories with numbers 

In the webinar, we shared some basic principles we use in our firm to allow our team to tell better stories with our clients' financial statements:

  • Limit the details displayed in the financials so as not to distract the client—and ensure they’re correct.
  • Deliver storytelling sessions in person over Zoom so that you can lead the client to understand the stories their numbers tell.
  • Guide the client to do as much talking as possible during these sessions; we are here to guide a client’s learning, not the other way around.
  • Ask the client to tell you what they’ve learned during the session, so they think more critically about their business.

Accountants have the power to help their clients grow in their ability to read their own numbers and mature as owners. We do this by setting clients up to explain their journey from thoughts and beliefs to why they made specific financial decisions. We can be their coach to greater understanding and strengthen their overall skills with financial analysis.

We hope these thoughts help you see more clearly what it takes to lead clients as a storyteller through their numbers each month.

Want to learn even more? Bookmark our Driving digital transformation series to hear from today’s industry thought leaders who have been there, done that, and are sharing what they've learned along the way.

The information provided on this page does not, and is not intended to constitute legal or financial advice and is for general informational purposes only. The content is provided "as-is"; no representations are made that the content is error free.