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Turning Data into Action

William HayesBy William J. Hayes, managing editor, Pennsylvania CPA Journal

Big data. Data analytics. These are phrases that have entered the lexicon of CPAs, and continue to grow in importance every day. Although we have access to more data than we ever have before, all that information doesn’t mean much if we don’t know how to translate it to create benefits and opportunities for clients. In advance of her presentation at the May 14-15 PICPA Not-for-Profit Conference, I sat down with Cynthia R. Bergvall, CPA, director of Bee Bergvall & Co. in Warrington, Pa., to talk about how CPAs can better communicate with decision makers who have not mastered the financial details within the data.

Cynthia R. Bergvall, CPAPICPA: The theme of your presentation at the PICPA Not-for-Profit Conference is “Turning Data into Action.” How important is it to be able to take data and translate it in a way that is understandable to personnel who may not be fully versed in financial details?

Data without context doesn’t provide much information. We can organize the data in a way that is meaningful. One way to get financial ideas across to the nonexpert would be through a sort of financial dashboard. The dashboard can help act as a financial interpreter. Picture your car’s dashboard. The displays and gauges provide important information, such as speed of the car; the amount of gas; oil life and levels; tire traction on the road; and the status of the engine’s cooling system. Many of us know very little about cars, but we understand the car dashboard.

The financial dashboard serves the same purpose. It communicates information in such a way that it doesn’t matter whether or not users of the dashboard understand finances.

Now, I don’t want to oversimplify the matter. Just as most of us learned the meanings contained on the car dashboard when we started to drive, so we need to learn the meanings contained on the financial dashboard.

What are a few steps that CPAs can take to communicate more clearly to decision makers who may not be versed in the technicalities of the finance world?

We need to ask them what their goals are and where they want to go. How are you planning on getting there? Why did you pick that process of getting there? What are your roadblocks?

We need to see the big picture. Once we know that big picture, we can start attaching measures to the goals and processes. Most roadblocks are not enough time and not enough money. Well, you can measure time and money.

CPAs understand context and story—basically, the story the numbers are telling us. But that is history. Those same skills can be used to help clients chart the future.

Make sure clients keep in mind the old adage: You can’t manage what you don’t measure.

Are there aspects of financial reports that nonprofit CPAs can work on to better leverage their message to nonfinancial personnel?

As CPAs, we need to work with our clients to find out why those results happened in the financial reports. If the results are good, what are we doing right that is driving those good results? If the results are bad, why are they bad and how can we change that?

Aspects of the financial report to zero in on will vary with each client. At the May conference, we will look at four different scenarios, each focused on a different part of the financial statement.

If financial personnel and nonfinancial personnel can get on the same page when it comes to understanding the available data, what benefits will an organization experience as a result?

I have seen dramatic results when organizations come together around data. It is not just in financial progress. When people in an organization see that what they are doing produces a tangible result—whether that is more donations, more people being served, more people surviving cancer—people get excited. They enjoy coming to work; they are more fulfilled; they are part of a team making things happen. Conversely, when things are hard, they understand their role in trying to make things better. Motivated, empowered people can do great things for an organization!

For more information on turning data into action, check out Bergvall’s presentation at the May 14-15 PICPA Not-for-Profit Conference. Registration information can be found at www.picpa.org.

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