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Why Different Stakeholders Have Different Reporting Needs

Why Different Stakeholders Have Different Reporting Needs

USGAAP Financial statement reporting has become a relatively mature and structured discipline – given audit requirements and institutionalized standards. Because of this, there is a degree of reliability, consistency, and comparability in traditional Financial Reporting realms.  But is standardized reporting enough on its own? 

Many companies maintain representative relationships with interested ‘third parties’ beyond the C-Suite. Some of these ‘stakeholders’ have reporting framework covenants as part of these relationships.  Examples of stakeholders may include (but not limited to) owners and proprietors, Private Equity, shareholders, regulators, lenders, creditors, bondholders, vendors, suppliers, officers, auditors, Government Agencies, analysts and even Trade Unions.  This is quite a list of very diffuse agencies and parties. Each group may place a very different lens on a company, but thematically all are oriented towards centrally monitoring performance, sustainability, and valuations.  Hence, there is rarely a ‘one size fits all’ reporting structure for these groups.

The four main Financial Statements that an organization may produce are the Balance Sheet, Statement of Comprehensive Income (aka Income Statement aka Profit and Loss Statement), Statement of Cash Flows, and Statement of changes in shareholders equities.  While there are underlying structural and procedural rules that dictate the preparation and presentation for official purposes (example: SEC, Annual Reports, 10Q and 10 K reporting), once reporting becomes specific for other interested parties, that’s when customization demands can get dicey.

Here are a few examples of different stakeholders and why their financial reporting needs may be very specific.

  • C-suite – Interested in comparability to budgets, forecasts, and certain Financial Key Performance Indicators. They seek to monitor performance management related to growth, margins, efficiencies, and strategic initiatives. Thus $ and % variance to a benchmark or budget, and Period over Period measurement may be important attributes that the C Suite will seek from Financial Reporting. Additionally, measurements of margin such as Gross Margin, EBIT and EBITDA, and Net Income are important metrics within Financial Reporting.


  • Private Equity – Interested in ‘rollups’ into a broader portfolio of businesses, particularly by industry or LOB. PE partners are also typically very interested in the speed of production of reporting. Oftentimes, certain PE firms may have proprietary or unique reporting needs, in addition to KPIs that had never been tracked. Because no investment group is created equal, its highly possible that reporting to PE (or even Venture Capital) may differ quite a bit from audited financials.


  • Auditors– The ability for companies to have an independent ‘set of eyes’ from an external auditor has been a cornerstone of confidence in the world’s financial systems. As such, they are interested in the accuracy and reliability of presented financial information. Organizations seek that coveted ‘unqualified opinion’ as an audit output, and thus having well organized, consistent, and transparent financial reporting and or financial reporting software, that allows auditors to check for classification, completeness, and accuracy. Access to underlying transactions through quick and easy digital access and drill down to examine and sample is paramount to minimizing the pain of an audit.


  • Creditors/Lenders – Interested in the ability to pay back debt and continued liquidity. Debt covenants are the contractual framework that some companies are bound by, and with those covenants come significant reporting requirements. The reporting is oriented towards signals of demand and the ability to generate sustainable cash flow. Additionally, insight into working capital management, liquidity and solvency are required.

In our examples above, four different stakeholders = four very different structures to financial reporting requirements. None of the above examples would accept basic, cookie-cutter Financial statements because their information requirements are purposeful and specific. Many organizations try to meet these requirements by trying to maintain a portfolio of financial reporting in Excel, which is highly manual, and wrought with massive risk.

There is a MUCH better way to resolve the multiple financial reporting stakeholder dilemma.  ReportFYI from FYIsoft is deliberately designed to allow for customization for virtually every stakeholder. The component-based architecture using Rows, Columns, and Organizational Trees allow for infinite permutations and customizations. Just mix and match. Reporting authors can build and tweak a full compendium of Financial Statement reporting with just a few clicks.

For more information on how ReportFYI can be the gamechanger in your organizations when it comes to financial reporting and financial reporting software, click on any of the links in this article or just click here.

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