Co-Authored by Mike Preuss at Visible.vc
Great boards with great board meetings generate discussion on the why and how of a business, not the what.
When board members are properly informed prior to meetings they can add strategic value. When they are not, they waste time in the details that should have already been understood in advance.
It is the CEO’s job to make sure the board pack is distributed prior to the meeting and use it as a way to spur pre-board meeting discussion. The board meeting is NOT the time to orient toward what’s going on with the business. Good board packs MUST provide a level of insight that informs a board so they can come to the board meeting ready to assist with strategic topics. That’s where variance analysis comes in.
How does variance reporting fit in?
In short, variance reporting is the unambiguous, objective measure of how you are doing vs (i) what you planned to do and (ii) how you did relative to a prior period. Revenue increased by 120% and was $1.2M last quarter. That sounds great, but what did we say we would do? And how does it compare to last year at this same time? What about last month or last quarter?
Your variance report will highlight where there may be “smoke” in the business and present the degree of it. The smoke could be good—this distribution channel is about to explode in growth and we need to make an investment to double down. Or it could be bad smoke—profit margin is slipping and we need to re-evaluate suppliers.
Variance gives the Company the ability to ask “why” and investigate. Simply put, variance analysis is good financial hygiene. The double benefit is that the Board will be able to see the results as well, using data plus the CEO explanation as the basis for fruitful and strategic discussion. The net result is accelerated growth, prioritization on what’s important, an improved bottom line, and maintained alignment with your board level promises.
Good variance analysis is the gateway to leveraging the board for their expertise, insight and past experiences.
To build a variance analysis requires data going into the system that is accurate and timely, whether that is revenue recognition, invoicing and collections, payroll, or G&A. For example, Stride helps clients manage transactional flows and reporting with efficient process and systems. CEO’s and boards want confidence in their data because it’s the basis upon which decisions can be made. Stride has proven itself a strong partner for CEOs in this respect. Read Stride Success Stories here.
Today, Stride is partnering with Visible to automate board-level deck creation including charts and variance reporting. Stride is providing the service layer to make sure the bookkeeping and accounting is accurate and structured appropriately. Stride then leverages Visible’s platform to extract the data from apps such as Quickbooks, Xero, Salesforce, and Google Sheets and automates the creation of variance reports and beautiful data visualizations, helping boards and CEO’s maximize their strategic time. We already have great feedback from early customers and we’re only getting started. Learn more about Stride’s Board Reporting Services.
If you want to learn more about the work that Visible and Stride are doing around empowering CEO’s and boards to save hours of wasted time and maximize strategic discussions, get in touch with us at firstname.lastname@example.org.
About Mike & Visible: Mike is the founder and CEO of Visible. Visible powers investor engagement for over 3,500 companies across the globe by helping company data sources and qualitative data.
About Russell and Stride: Russell is the co-founder of Stride. Stride provides fully outsourced bookkeeping, accounting, and HR services to hundreds of high growth companies nationally that want to spend more time moving their business forward with fewer back-office distractions.