5 Tips to Improve Your Financial Storytelling

Crafting a narrative around financial data transforms complex figures into a relatable story.   

Financial storytellers who have mastered the skill use data to create a holistic approach to understanding an organization’s financial health.  

Whether they are addressing management and executives, investors, or clients, financial storytelling is a valuable tool to convey insights and drive decisions. 

In this article, we'll explore five indispensable tips that manufacturing accountants can use to elevate their financial storytelling game.

1.  Use All of the Data

Piecing together and translating data into meaningful insights is the first step in telling the financial story of a manufacturing business. When done correctly, it allows accountants to provide valuable information to:  

• Management 
• Stakeholders 
• Decision-makers  

That information is then applied and used to make informed decisions to improve the company’s operations and financial performance. Here are a few examples of using data for financial storytelling: 

• Cost Analysis 
  • Manufacturing accountants should analyze cost data to determine the cost structure of different products or production processes. From there, accountants can compare budgets to actual costs or industry benchmarks to pinpoint areas of inefficiency or cost-saving opportunities.  
• Inventory Management 
  • Manufacturing accountants can use inventory data to monitor turnover ratios, assess carrying costs, and identify slow-moving or obsolete inventory. This information can then be used to make decisions about production scheduling, purchasing, and overall working capital management.  

2.  Know the Audience

How manufacturing accountants tell the story of a business varies depending on the target audience. Different stakeholders have varying levels of financial literacy, interests, and concerns, so tailoring the information to match their needs is essential. Below are two examples of tailoring the financial story to match the intended audience.  

Management and Executives  

To meet the needs of management and executives, manufacturing accountants should focus on high-level insights and key performance indicators that directly impact strategic decision-making. The following metrics will be important:  

• Profitability 
• Cost efficiency 
• Operational efficiency 
• Capital investments  

The most benefit will come from presenting concise summaries, visualizations, and trend analyses to help them grasp financial performance and identify areas for improvement.  

Investors and Shareholders 

Investors and shareholders are interested in the company’s financial stability, growth prospects, and returns on their investment. They will be interested in things like:  

• Financial ratios 
• Earnings per share 
• Dividend policies 
• Long-term strategies 

Manufacturing accountants should focus on transparency in revenue streams, profitability, and future growth plans when financial storytelling to investors and shareholders. 

3. Understand the Problem

With a strong understanding of the issues a manufacturing company is facing, accountants can provide a more accurate picture of its financial performance.  

 This is commonly known as root cause analysis, which includes investigating the causes of things like:  

• Cost overruns 
• Declining margins 
• Production inefficiencies 
• Revenue shortfalls 

Figuring out the root cause (or even influencing external factors) allows manufacturing accountants to create a narrative that explains why these things are happening. This allows the company to make adjustments based on sound data. 

4.  Set the Stage Properly 

Setting the stage is essential for manufacturing accountants when telling the financial story of a business. It allows stakeholders to understand the financial narrative correctly by establishing:  

• Context  
• Relevant background information  
• A framework for the information  

By setting the stage, manufacturing accountants can ensure that their communication is clear, engaging, and focused on key aspects of the business's financial performance. This can be done in a variety of ways, but here are a few examples of how manufacturing accountants can set the stage to tell a financial story:  

• Explain the company’s strategic objectives and long-term goals. 
• Describe the broader market trends, competitive landscape, and industry challenges. 
• Highlight recent events, like acquisitions, partnerships, product launches, or operational changes. 
• Identify major challenges and opportunities the company is facing.

5.  Educate, Familiarize, and Practice

Educating, familiarizing, and practicing are crucial in effectively telling the financial story of a business. For manufacturing accountants, they involve: 

• Building their own expertise 
• Understanding the intricacies of the business they are working with 
• Refining their communication skills 

Investing in these areas is key for manufacturing accountants because it enables them to convey complex financial information in a clear, engaging, and impactful manner. 

Master Financial Storytelling to Improve Your Value 

Mastering financial storytelling adds value to manufacturing accountants. It contextualizes financial data and helps stakeholders understand the link between financial results, operational strategies, and external influences. It also educates non-financial stakeholders, conveys complex concepts, and enables quick adaptation to changing business dynamics. 

Manufacturing accountants will also notice that effective financial storytelling:  

• Enhances communication by presenting intricate financial information in a way that’s easy to understand 
• Engages stakeholders and informed decision-making 

The list of benefits goes on, but what’s important to understand is that like many other tools used to add value to manufacturing accountants, financial storytelling is just a small piece of the puzzle. Add it to your toolkit and you’ll become more indispensable.