Reporting Data to Clients

When preparing reports or spreadsheets for leadership, the data and numbers tell a story. Sometimes, these fit the narrative decision-makers want to project, and others do not. When working in managerial or cost accounting, the stress is on financial decision-making instead of simply reporting numbers.

The decision-maker who questioned these figures fell victim to two types of bias. The first one is confirmation bias. Confirmation Bias occurs when specific fact patterns or numbers back up a position, but one ignores other relevant information or data that might be contradictory.

The second bias, which is also common in jobs that require numeracy, is the rush to solve bias. A decision-maker may need information right away, and therefore, analyses that were performed might be rushed and incomplete. When coming to the finance team with a complex problem, adding the extra pressure to solve right away doesn't help.

When problems are not analyzed from all angles, and there is no time to triangulate the results, the presented information can seem misleading and untrustworthy. The worst thing for a board or leadership is not having faith in the accounting staff or their work product.

The lesson is that those in leadership should put their feelings aside and digest what the finance team is communicating. Giving the finance team an hour or two to solve complex issues is probably insufficient for the necessary results. It's better to give half a day or until the close of business as a deadline, especially if it’s urgent, mission-critical, and the solution or presentation needs to be thought out.

Bias can get in the way, but it's up to the finance department to remain neutral and be an ally to all. After all, the purpose of the finance team is to be a fiduciary and to ensure the organization is solvent, liquid, and profitable.