It can be overwhelming trying to figure out what to include in your board report. Whether you’re working for a large not-for-profit with a formal board or a small business where the board meeting happens around the kitchen table, providing good, useful reports is essential to the success of the enterprise.
Sometimes, it can also feel like a challenge to compile your report if your board is made up of a mix of people. After all, the members may be from a variety of different sectors and they all want to see something specific from your board report. It doesn’t have to be a challenge preparing a board report.
At the end of the day you can’t include everything in your board report and you aren’t meant to either.
But, before we get into the three things to include in your report, there are two tips to keep in mind while collating your board report.
- Focus on the Highlights
- Summarise for easy reading
Board Report Highlights
A board report isn’t meant to cover every detail of how your organisation has progressed. Instead, it is designed to give a summary of the past year, quarter or month. These highlights must give your governing body just enough information to make decisions and to guide it in its next steps. As conclusions will be made based on the information you provide, it is vital that you give your board the right stuff to read.
Keep the Board Report Concise
The board members reading your report are busy and passionate people. Your board members will have chosen to be on the board because they care about what your organisation stands for and the difference that it makes in the world. As passionate people, board members will often be on multiple boards and committees. This means, they might not have time to read long reports before a meeting.
Sometimes a board member may just get to reading it a few minutes before the meeting starts!
Keep in mind that your board needs something that they can scan quickly. The more visual the better. If you have visual content in your report then they can glance at it during the meeting while you present it, giving you their full attention.
What to Include in Your Board Report
So, to keep it very simple, there are three key insights that you must include in your board report. If you have these included, then you have given your board an overview that includes just the right amount of information for them to use. Any additional information that you cover will be a bonus.
The board needs to manage and direct the strategy of the organisation and these 3 reports will help with that.
- Actual to Budget
- Cashflow Forecast Chart
- Business Unit Summary
1. Actuals to Budget
Your board needs to know how your organisation is going compared to the budget set at the beginning of the year.
Are things going better or worse than expected? Are goals being met?
Calxa has many reports to suit this task and each organisation will choose a different one. Some people like to focus on just one month or just the month and year-to-date figures. Others like to include a comparison to the previous year as well. However, the Unspent Budget report templates work well for many not-for-profit boards. You can show progress for the month and year-to-date and also against the full year budget.
Budget Comparison at a Glance
Board members can see at a glance how the organisation is progressing in comparison to the budget. Most importantly, the approved budget at the beginning of the year. Furthermore, they can also see what is left for the rest of the year and if there is enough money for what is planned to come.
Tracking Grant Funding
The Unspent Budget report is also critical in tracking grant funding. The bulk funding from the grant is budgeted across the funding period in the report. Then each month it is easy to compare it to the actual spent and gives a picture of any over/under spending. Boards don’t need to oversee every grant that the organisation receives but sometimes there are some that are so big, relative to the size of the organisation, that it’s absolutely critical that the board has some oversight.
Usually, your board doesn’t need the detail of every single account so use an Account Tree to summarise and group them in a meaningful way. You can use headings in the Account Tree. This allows you to use less technical language than you have in your accounting system. Ultimately, it really makes the board report readable. This is especially important if your board members aren’t fully financially literate. Make it easy for them to understand the information you are presenting . As a result, they will be able to make sound decisions.
2. Cashflow Forecast Chart
A Cashflow Forecast Chart gives an overview of how your budgeted income and expenses are affecting your cash in the bank. A good Cashflow Forecast Chart should show the predicted bank balance compared to the inflows and outflows.
Charts for Non-Accountants
Although a chart may appear to be very simplistic, this is a chart that everyone understands. Your board will be comprised of people from all sorts of backgrounds, so keeping the information concise and simple is very important.
Information can never be laid out too simply.
Board Reports to help with Legal Responsibilities
Boards have legal responsibilities to ensure the organisation is solvent. In the event of insolvency, they will need to demonstrate that they took steps to stay regularly informed of the financial situation. Reviewing a cashflow forecast chart is a simple way of doing this that doesn’t require the board member to have a degree in accounting. They can monitor the direction of expected cash balances and ask questions when they are forecast to look problematic.
If a board member wants more detail – and there is always one! – you can provide a detailed forecast with numbers. Also, more detailed information on expenses can be included after the main summary graph. Simply use a separate document to include these additional data.
3. Business Unit Summary
Board members will want to see how your projects or departments within the organisation are progressing. This report shows a break-down of the income and expense by the project. In addition, this summary report clearly shows which departments are on track and which are not. All this without the board members having to wade through a detailed report on each. If you want to highlight the best or worst-performing departments, sort the report by Income or Profit/Loss for the month or year to date.
In a group with multiple companies, this same report can show one line for each entity in the group, providing the board with that valuable overview.
How to Create Your Board Reports
Here at Calxa, we’ve made it easy for you to create all the reports that you need for your upcoming board meetings. Just link to your accounting software, add your budgets and start creating your board report.
We ran a series of not-for-profit webinars including How to Automate Board Reporting. This recording talks you through what reports you can create with Calxa. It also shows you how to automate their creation whenever you have a board meeting coming up. There is also a corresponding blog on Automating Board Reporting, so make sure to have a read too.
We Understand NFPs
We work closely with not-for-profits and have helped over one thousand NFPs with their reporting through our donation program. Our software is built to support your need for board reports. Furthermore, Calxa gives you enough flexibility, as every NFP is unique. We have a range of reports that you can choose from depending on your needs.
Find out more about how we help NFPs to create reports here.
One Last Thing to Include in Your Board Report
Whatever way you end up creating the reports for your board meeting, whether automated by Calxa or not, remember to include your passion.
Passion is not something that can be measured in a graph or a table in a board report. However, it can be felt when a report is read and/or presented. So, make sure to keep in the forefront of your mind why you do the work you do. And most importantly, whose lives you transform by working at your NFP.