Learn how to create actionable P&L reports for managers, investors, lenders, or regulators by understanding their interests, choosing the right format, providing context and analysis, and soliciting feedback and improvement.

I am a strong believer of driver based reporting and analysis. Not only does it allow for the right business context, it also allows for action oriented insights that can improve business performance.

How can you ensure P&L reports are actionable for different stakeholders?

A profit and loss (P&L) report is a vital tool for measuring the financial performance of a business. However, not all stakeholders have the same information needs or expectations from a P&L report. How can you ensure that your P&L reports are actionable for different stakeholders, such as managers, investors, lenders, or regulators? Here are some tips to help you tailor your P&L reports to suit your audience.

1 Understand your stakeholders

The first step to creating actionable P&L reports is to understand who your stakeholders are and what they care about. Different stakeholders have different goals, perspectives, and levels of expertise when it comes to financial analysis. For example, managers may want to see detailed breakdowns of revenues and expenses by product, region, or channel, while investors may focus on profitability, growth, and cash flow metrics. Lenders may look for debt ratios, interest coverage, and liquidity indicators, while regulators may require compliance with accounting standards, tax laws, and disclosure rules. By identifying your stakeholders and their interests, you can decide what information to include, exclude, or highlight in your P&L reports.

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Sumeet Sharma

Assistant Director @ EY | Corporate Finance | Finance Transformation | Project Management | Strategy and Transaction | Investment Banking |
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From my experience in working with various stakeholders in fp&a and operations, everyone is more concerned is about future prediction...they are interested to know what the available data for this year and previous years can provide direction for future decisions and course of actions....what type of decisions would be helpful in improving profitability Another aspect is experience, they do not want huge excel files with calculation they would like to see the impact in a summarised view in power bi dashboard in real time

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Kumar Gaurav

Futurist | An Expert in designing and implementing digital solutions in Enterprise Performance & Analytics (EPA), Finance and Procurement | GBS/ Shared Services design and set-up
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I agree, your story telling with numbers will always vary with the stakeholders. Not only who but his style is also very important. In my experience, both as consultant and in operations, I have had experienced different style of analysis/ presentation. Example, some prefers headlines vs a detailed analysis, some track lead indicators and trust the team to look at the details and take appropriate actions as needed

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2 Choose the right format

The next step is to choose the right format for your P&L reports. Depending on your stakeholders and their preferences, you may need to use different formats, such as tables, charts, graphs, or dashboards. For example, tables may be useful for showing numerical data and comparisons, while charts may be effective for visualizing trends and patterns. Graphs may help to illustrate relationships and correlations, while dashboards may provide a summary of key indicators and alerts. You may also need to use different levels of aggregation or disaggregation, such as monthly, quarterly, or annual reports, or segmental, consolidated, or adjusted reports. By choosing the right format, you can make your P&L reports more readable, understandable, and appealing for your stakeholders.

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Kumar Gaurav

Futurist | An Expert in designing and implementing digital solutions in Enterprise Performance & Analytics (EPA), Finance and Procurement | GBS/ Shared Services design and set-up
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It depends on the stakeholders, but the fact is that devil lies in the details. Hence, it is always important to do a bottom up understanding to decouple presentation style with Analytics. Also, an important consideration while analysing P&L is the correlation with the underlying drivers. Without the understanding of the drivers, one will never be able to choose the format in which the analysis is best explained

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Arun Rajan

Senior Controller/FP&A Manager
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I would recommend the use of detail reports that roll-up to numbers in the P&L: For example, if you want to better understand subscription revenue, you should look at revenue by customer report which is a powerful “actionable” report by BU managers to either save leaving clients or converting downgrades to status quo. The revenue by customer would be divided into 6 parts: 1. Current run rate 2. Attrition 3. New customer revenue 4. Downgrades of service 5. Upgrades of service. Secondly, the best way to analyze salary related expense and manage headcount costs is to review salary cost by employee report. Another example, if you want to analyze software spend, expense by vendor report is an useful tool.

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3 Provide context and analysis

The third step is to provide context and analysis for your P&L reports. A P&L report is not just a collection of numbers, but a story of how your business performed in a given period. To make your P&L reports actionable, you need to explain the meaning and significance of the numbers, and how they relate to your business objectives, strategies, and challenges. For example, you may need to provide commentary on the drivers and variances of your revenues and expenses, the impact of external factors such as market conditions, competition, or regulation, and the implications of your results for your future plans and actions. By providing context and analysis, you can help your stakeholders interpret your P&L reports and make informed decisions.

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Kumar Gaurav

Futurist | An Expert in designing and implementing digital solutions in Enterprise Performance & Analytics (EPA), Finance and Procurement | GBS/ Shared Services design and set-up
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I am a strong believer of driver based reporting and analysis. Not only does it allow for the right business context, it also allows for action oriented insights that can improve business performance.

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4 Solicit feedback and improvement

The final step is to solicit feedback and improvement for your P&L reports. A P&L report is not a one-way communication, but a dialogue between you and your stakeholders. To ensure that your P&L reports are actionable, you need to seek feedback from your stakeholders on the quality, relevance, and usefulness of your P&L reports, and how they can be improved. For example, you may ask your stakeholders if they have any questions, comments, or suggestions on your P&L reports, and how they use them for their purposes. You may also use surveys, polls, or interviews to gather feedback and measure satisfaction. By soliciting feedback and improvement, you can continuously refine your P&L reports and meet your stakeholders' expectations.

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5 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?

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How can you ensure P&L reports are actionable for different stakeholders?

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1 Understand your stakeholders

2 Choose the right format

3 Provide context and analysis

4 Solicit feedback and improvement

5 Here’s what else to consider

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