As a business leader, communicating your company’s financial performance effectively is absolutely critical. But it can also be a major challenge. Financial results are complicated, stakeholders have diverse needs, and poor communication can erode trust fast. Where do you start to share financials in a way that informs, inspires and aligns your audiences?

I faced this dilemma early in my career as a young CFO. Our financial reports were dense with jargon and metrics that made sense to accountants but confused everyone else. Employees fretted about rumored losses and shareholders wondered if we had a cohesive strategy. I knew we had to get better at financial storytelling.

Over the years, I’ve developed some go-to principles for communicating finances across the full range of stakeholders, from investors to staff. In this post, I’ll share the tactics I wish I knew earlier to turn financials into simple, compelling stories that drive understanding and support.

Whether you’re new to financial reporting or a seasoned pro, I hope these tips help you connect the dots for stakeholders and advance your business goals through sharper financial communication. Let’s dive in!

Who Are Your Key Stakeholders?

First, you need to identify the core stakeholders for your financial communication. Who beyond executives and the board needs insight into the numbers? For most businesses, key groups include:

Shareholders

Shareholders own shares in your company and want to understand financial results to value their investment. They crave financial transparency and performance that aligns with their interests. Shareholders include:

• Individual investors
• Institutional investors (e.g. mutual funds, hedge funds)
• Private equity firms
• Venture capital investors 

Employees 

Your workforce wants to understand financials to gauge the health of their employer. Financial performance also impacts their job security, compensation and benefits.

Customers

Customers want signs your company is stable and positioned for growth. Large customers may require financial transparency before signing major contracts.  

Suppliers

Suppliers use your finances to assess the risk of doing business with you. They want assurance you can pay your bills.

Local Community

The local community cares about your impact on economic and job growth. They also want to know your tax contributions and corporate citizenship.

Why Financial Communication Matters

Effective financial communication provides many benefits, including:

– Enhances trust and credibility – Openness about finances demonstrates transparency and builds trust with stakeholders.

– Sets expectations – Financial results allow stakeholders to calibrate expectations about your company’s performance.

– Drives investment – For shareholders, financial performance indicates the potential return on investment. Strong results can drive further investment.

– Builds employee alignment – When employees understand financial goals, they can better align their work.

– Reinforces strategy – Financials bring your business strategy to life in concrete terms.

– Manages risk – Explaining potential risks and upside in financials allows stakeholders to make informed decisions about engaging with your business.

In contrast, poor financial communication breeds anxiety, erodes trust and limits transparency for stakeholders. That’s why great leaders make financial storytelling a priority.

Key Principles for Effective Financial Communication

The best financial communicators embrace several important principles:

Be Clear and Concise

Avoid technical jargon and speak in simple, plain terms about financial results. Emphasize key messages and data that matter most to your audience. Less is more.

Be Transparent  

Present financial results openly and honestly without spin. Don’t just share the good news. Build trust by admitting setbacks or areas for improvement.

Use Visuals

Illustrate financial data visually through charts, graphs and infographics whenever possible. Visuals make numbers more understandable and memorable.  

Highlight Key Metrics 

Focus on the vital few metrics that indicate financial health and strategy execution. Avoid data overload.

Tell a Story

Connect the dots between financial results and what they mean for the business strategy and future outlook. Weave data into compelling narratives.

Customize for Each Audience

Tune financial communication to what matters most for each stakeholder group. Avoid one-size-fits-all communication.

Communicating with Shareholders

Shareholders have deep interest in financial metrics that indicate the value of their investment. Here are key channels for reaching shareholders with financial results:

Earnings Calls

These quarterly phone calls allow leadership to discuss latest earnings results, business outlook and strategy with investment analysts. Calls should highlight data relevant to company valuation and growth prospects.

Annual Reports 

The yearly, in-depth reports showcase audited financial results alongside company strategy, risks, opportunities, leadership and governance. A well-crafted annual report shapes investor perception.

Investor Relations Materials

From investor presentations to the IR section of the corporate website, IR materials must provide shareholders with the information they need in accessible formats.

Communicating with Employees

Employees represent a huge audience for financial communication. Leaders should make concerted efforts to improve employees’ financial literacy and align them with top priorities. Useful modes of communication include:

Town Halls

Company-wide town halls or large departmental meetings provide a forum for senior leaders to present the latest financial results and take questions in an open, transparent manner.

Internal Newsletters

Monthly or quarterly newsletters distributed by email and intranet make ideal vehicles for highlighting financial metrics and tying them back to corporate strategy for employees. Short articles keep content digestible.

Intranet Dashboard

An intranet dashboard with frequently updated financial and performance metrics gives all employees on-demand access to numbers. They can understand priorities and track progress.

Communicating with Customers

While customers may not need the same level of financial detail as shareholders, financial stability often factors into purchasing decisions. Avenues to communicate finances to customers include:

Website

Posting annual reports, press releases about earnings, and other financial performance indicators on your website offers an information resource for prospects.

Sales Pitches 

Client-facing employees should be equipped with financial talking points to weave into sales conversations casually. This builds credibility.

Social Media

As a digital hub for brands, social media represents a natural platform for sharing earnings announcements, growth data points and community investment figures.

Communicating with Suppliers 

Suppliers have keen interest in your financial wherewithal, particularly smaller vendors who count on timely payment. Communication tactics include:

Supplier Portals 

Password-protected online portals that allow suppliers access to your financial statements and risk metrics provide transparency.

Supplier Conferences

Hosting periodic in-person conferences for major suppliers gives the opportunity for senior management to directly share financial results impacting the supplier relationship. 

One-on-One Meetings

For critical suppliers, regular check-in meetings should include financial trend updates, new opportunities, supply chain optimizations and other metrics that impact the supplier.

Communicating with Local Communities

Local communities care about your economic impact, job creation and community citizenship. Outreach initiatives might include:

Press Releases

Proactively announcing major financial results, new capital investments and hiring plans helps rally community support.

Local Events

Having executives speak about the company’s financial outlook at town halls, chambers of commerce and other public events informs the community.

Social Impact Reports 

Publishing annual reports on your community contributions, volunteer hours and other social impact measures the value you provide beyond financial returns.

Bringing It All Together 

Financial communication should thread through every aspect of stakeholder outreach. Integrating key messages across communication channels builds familiarity with your financial narrative. 

When launching new financial communication, solicit feedback via surveys and meetings. Evaluate what information best meets stakeholder needs so you can continuously improve. 

With time, your stakeholders will gain financial fluency and become savvy partners in driving your business vision.

Conclusion

Financial results tell a powerful story about the health and strategy of your company. Skilled leaders view financial communication as an opportunity to educate, align and inspire stakeholders. By embracing storytelling and simplicity, financial data can motivate investors, unify employees and build trust with partners.

Remember, great communication requires keen understanding of your audiences. Tailor financial data to what matters most to each group. Be transparent, embrace visuals and customize the narrative. When stakeholders feel empowered with financial knowledge, they can help propel your business to new heights.