How (and Why) to Hold a Monthly Finance Meeting
How do you evaluate your company’s financial performance?
a) Check the bank account religiously, then celebrate or stress accordingly
b) Wait for the quarterly update when you evaluate your OKRs, then celebrate or stress accordingly
c) Fire off random emails about projected sales, outstanding A/R, and that one software you thought was canceled a few months ago, but maybe the team decided to keep it after all?
The answer should be d) Hold a Monthly Finance Meeting.
This meeting is as straightforward as it sounds: an opportunity for you, your finance leader, and other key leadership team members to discuss your company’s finances. A chance to ask questions in a moment where the answers can come from real data, with context.
And a moment to hold you (yes, you) accountable for the company’s financial results.
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The Monthly Finance Meeting provides dedicated time to review monthly reporting and discuss any related issues. In order to conduct this meeting, your books have to be clean and closed for the month. You have to have a mechanism for generating finance reporting.
Do these things, and you’re already ahead of many other businesses.
Common Questions about the Monthly Finance Meeting
Who joins the Monthly Finance Meeting?
Some or all senior leadership team members. At minimum: CEO, COO/President, CFO, CRO, Controller. Sales, Marketing, HR, and other leaders are optional—use discretion when inviting these folks. You want to be able to have a conversation specifically about financials, and some of this data may be sensitive. Alternately, non-financial folks may not gain much from being part of these discussions (as CEO, though, you’ve got to join, whether you consider yourself non-financial or not).
Who leads the Monthly Finance Meeting?
Your finance leader—CFO or Controller—should lead this meeting. It’s their job to walk through the agenda. It’s your job to ask questions and listen to their answers.
When is the Monthly Finance Meeting?
This meeting should be held after the monthly close to ensure accurate reporting. Aim to close your books by the 15th of the following month, and hold this meeting as soon as possible after that. Ideally, schedule it for the same day/time every month.
What’s the agenda?
The agenda is simple:
- Summary
- Review reporting
- Discussion
Summary
The CFO/Controller kicks off this meeting with a summary of the month: What story do the numbers tell? They should include highlights for the month, quarter, and year to date—good and bad.
Whenever possible, you’ll want to hear the “why” behind the numbers. Knowing why your financials look the way they do helps you make decisions about what to do next.
Review Reporting
The CFO/Controller will walk you through the Income Statement/P&L, Balance Sheet, and Cash Flow statements. Not every company will walk through the balance sheet and cash flow statements monthly, but they should review them at least quarterly (more often is cash flow is a concern).
For the P&L, compare the results against the budget, prior period, and previous year. Data should include monthly, quarterly, and annual comparisons.
Dig into any variances between budget and actuals or trends that emerge from these comparisons.
Next, you should review the Rolling Income Statement—my personal favorite report. This is what the year looks like based on actuals to date and projections for the future. Discuss:
- How does this month impact next month?
- How does this month impact performance for the entire year?
- Do any adjustments need to be made to the current plan?
Discussion
This is time for open Q&A and a chance to address any issues that came up during the meeting in more detail. If you’re making changes, how will you implement those changes, and what are the next steps?
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There’s one last question we should address:
Who is the Monthly Finance Meeting really for?
Here’s the thing: this meeting isn’t for your finance leader. They’re in charge of facilitating the conversation, but chances are they are already intimately familiar with this data and the company’s performance.
Not to mention that it isn’t their job to own the company’s financial performance (although in some cases, they do provide important guidance). If revenue is down or profits are below expected levels, that ultimately comes back to…the CEO. Which means this meeting, in truth, is for you.
It’s a chance for you to get the information you need so you can make the best possible choices for your business.
It creates a black and white environment where you are forced to look at the numbers objectively. Did you hit your goals? Are you falling short?
In a conversation where that’s really the only topic, it’s hard to avoid the issue.
The Monthly Finance Meeting is about holding you accountable, and giving you the data to course-correct as needed.
If you don’t have this meeting on your calendar for January, I’d challenge you to set one up before month-end.
Let me know how it goes.
