Financial information can be creative too
Turning a creative pursuit into a commercial business is an exciting, rewarding journey – but it comes with its own set of challenges. As an advisor to creative clients, one of the biggest hurdles that I come across is that to understand your finances, they have to be presented in a way that makes sense to you – and that has challenged me to think more creatively in delivering meaningful information.
A standard set of financial reports is difficult for anyone to see where and how their business is thriving, especially when you are used to thriving on the visual details. If this sounds like you, you are not alone. Our role at Holman Hodge is to develop and interpret traditional financial reports, so we find the black and white lines of numbers interesting and telling. But if you’re not an accountant by trade, seeing where adjustments can be made simply by reading a profit and loss statement is difficult. I’ve learnt that to support our clients to pinpoint areas to focus on and truly use financial information as a decision making tool, financial data needs to be presented in a way that feels intuitive and engaging. When it comes to financial management of a creative business, traditional reporting at times doesn’t cut it. So, we’re now thinking more creatively when we present financial data too!
We’re proud to say that our financial reporting is far more colourful than it used to be, and it makes a huge difference as a decision making tool. One of the most effective strategies in supporting clients is to present financial data in a format that resonates with how they naturally process information – and that’s visually.
Let’s take, for example, a standard revenue statement and present a graphical representation of the revenue streams by geography, product line or sales channel – we can immediately see the results. Let’s look at a 2023 – 2024 financial year comparison, based on the product lines in a fashion house.
From the graphs above, it’s easy to see which product dominates the revenue mix (clothing) and where sales have grown in the past year (shoes). In the first column of graphs, you can see that sales of clothing represents 55% of the total sales in the year ended 30 June 2023. In the following financial year, overall sales grew by 30% and we can see that shoe sales and clothing were the product lines responsible. The trends are far easier to spot from these graphs and we can quickly see where we need to make decisions around distribution and sales support.
Our goal is to shift from overwhelming reports to meaningful insights that drive faster, better decisions.
Finding the right financial format for your decision making
Many creative entrepreneurs and business owners know that a standard financial report is challenging but don’t know what options or ways there are to make them better … until they see it! That’s why my process, of understanding your business and goals, starts with a conversation to find out:
- What information do you actually need to know?
- What are the biggest pain points in your business?
- What would help you make quicker, more informed decision?
Once we identify the critical information and numbers we need, whether it’s from sales trends, cash flow, product pricing or breakeven points, we can then present you the data in different formats and refine it to suit your preferences.
Turning passion into profit
Turning passion into profit is not easy, regardless of being a creative or otherwise. It’s not only about being good at your craft, it’s about understanding your numbers in a way that works for you and using this to make better decisions.