Finance: Outlook - Accounts as a communications tool

Finance professionals have a key role in making data accessible, writes Paul Breckell.

"So remind me again, is this important or not?" asks Church Mission Society's hard-pressed regional director, back from an exhausting visit to Afghanistan and straight into a board meeting. The agenda item is the report and accounts, and it is being brought up as a gentle reminder to colleagues that they need to provide their inputs into the first draft of the trustees report.

Mixed message

Although I could be irritated by the comment, I must admit that the mixed message as to the importance of the report and accounts is as much the fault of the financial director as anyone else.

Yes, of course we believe in a set of high-quality accounts that constitute an effective reporting tool; but in our heart of hearts, we wonder how many key stakeholders are going to work their way through the trustees report, however inspiring and engaging it is. Even the most committed will surely have lost interest before the three-page FRS17 disclosure in note 16.

So, as we wait to see how Sorp 2005 plays out, here is the challenge: as the continuing development of accounting practice in the sector leads to a higher and higher degree of consistency and therefore comparability, it runs the risk of being a more and more difficult code for even the best informed donors, supporters and beneficiaries to break.

We cannot afford to rely complacently on our annual review as the glossy communication tool, while relegating the report and accounts to a dusty cupboard. Nor can we be precious about the fact that we are so unique that we could not possibly be compared to anyone else.

While we do this, others are setting the agenda, whether through well-researched and developed tools such as Guidestar or rough and ready - and often damaging - league tables.

Although there are many examples of good practice in charity sector reporting, we still have much to do in terms of quality performance measurement and presenting our mission, objectives, outcomes and impact in a professional but accessible way. This is where finance professionals have a key role to play, bringing together data into meaningful reporting, so that even if the report and accounts continue to be the 'bridesmaid' to other communication tools such as annual reviews, we will still be producing a reliable source document, which can be summarised and adapted for a wide variety of communication approaches.

My hope is that in the future, if a hard-pressed regional director of CMS asks "Is this important or not?", I can say, without doubt or hint of irony: "Yes, because it is adding value."

Paul Breckell is the finance director of Church Mission Society and the chairman of the Charity Finance Directors' Group

KEY POINTS

- As accounting improves in the voluntary sector, it may become more difficult to communicate financial information

- Finance professionals must present data in an accessible way

- Accounts can be used as source documents for a variety of communications.

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