Before and after: one monthly report, redesigned to IBCS®

It is the tenth working day of October. The September monthly report is in front of the management board: twelve pages, and on page three the revenue split as a pie, next to it actual versus budget as columns in four colours. The CFO wrote the comment himself the evening before. The board nods, asks about order intake and moves to the next item. No decision – not because there is nothing to decide, but because the page proposes nothing.

Stage 1: the starting point

The example is fictitious, but every number in it is realistic: an industrial group with four divisions – Plant Engineering, Components, Service and Trading. The page reports revenue and contribution margin for September in TCHF. This is what it looks like in many monthly reports today.

Stage 1, left chart: revenue shares as a 3D pie. Perspective enlarges the front segment; the percentages sit in the legend.

Stage 1, right chart: actual against budget as columns, each division in its own colour, budget in a lighter shade. No prior year, no variance.

The comment below reads: "Revenue for September amounts to TCHF 8,280. Plant Engineering achieved TCHF 3,380, Components TCHF 2,410, Service TCHF 1,520 and Trading TCHF 970. Contribution margin stands at TCHF 2,121." Five sentences that repeat what the chart shows. No prior year, no variance, no judgement.

Three rules from the IBCS® Standards are broken here, and each one has a cost. EXPRESS requires the chart type to fit the message: a pie can show shares but not a comparison to plan – and in 3D it cannot even show shares, because the perspective enlarges the front segment. SIMPLIFY requires removing everything that carries no information: eight meaningless colours, shadows, a legend, gridlines. SAY requires a message: the title "Revenue actual vs. budget" is a label, not a sentence.

The cost can be measured in meeting minutes. The board spends twenty minutes understanding the numbers and zero minutes talking about causes. The fact that the contribution margin in Service is almost five percentage points below plan appears nowhere on this page. It surfaces at the quarter close, seven weeks later, after three further months have run at the same margin. On TCHF 1,520 of monthly revenue, five percentage points are roughly TCHF 70 a month – more per quarter than the design of this page has cost over its entire life.

The fault lies not with the author but with the brief. Nobody asked the purpose question: what are these numbers supposed to tell us, and what are they for? Without an answer, the page shows the value – and the value alone carries no decision.

Stage 2: decluttered, but without a reference

The first rebuild is quick and needs no notation concept. The pie goes, the columns become horizontal bars, one colour, sorted in descending order. The title gets a statement.

Stage 2: horizontal bars, one colour, sorted, message in the title. Readable in three seconds – but a value without a reference.

SIMPLIFY and EXPRESS apply here. Bars are compared by length, not by angle; sorting saves the reader the ranking; the highlight draws the eye to the largest division. The comment no longer repeats the numbers but says: "Plant Engineering and Components account for 70 % of revenue; Trading is the smallest division at TCHF 970."

For the meeting, however, little changes. The page is cleaner and faster to read, but it answers the same question as before – how big is revenue – and that question leads to no decision. Is TCHF 3,380 in Plant Engineering good? Nobody knows while budget and prior year are missing. Comparison is information; the value itself is rarely needed. This is why the second stage is often the more dangerous one in practice: it looks professional and reassures, without saying anything.

Stage 3: IBCS®-compliant – the page proposes the decision

The second rebuild does not change the chart but the logic behind it. Every value gets its references, in a fixed order: prior year – actual – budget, with time running from left to right. The notation is uniform: actual solid dark, budget outlined, prior year grey. To the right, the variance to budget stands as its own bar with a sign, positive to the right, negative to the left. Both charts share one scale, so that a centimetre means the same amount of money everywhere. The title is a sentence.

Stage 3, upper chart: prior year grey, actual solid, budget outlined; variance to budget as a signed bar on the right. Plant Engineering +250, Components +170, Service −50, Trading −50.

Stage 3, lower chart: contribution margin per division in percent, same notation. Three divisions within tolerance, Service clearly below.

The page title sums up both charts: "Revenue +4 % to budget, carried by two divisions; contribution margin in Service below plan." The comment follows the three-step structure Soufyan Hamid recommends for finance presentations – What, So What, Now What (Hamid 2023, pp. 12–15): what happened, what it means, what needs to be done. "The Service margin, at 33.2 %, is around five points below plan and prior year; group contribution therefore grows by only 1 % despite +4 % revenue. The head of Service will clarify by 15 October whether discounts or overtime are the cause."

UNIFY, CONDENSE and SAY apply here. UNIFY ensures that prior year, actual and budget look the same on every page of the report; once you have learnt the notation, you no longer need a legend. CONDENSE brings three scenarios, two measures and eight variances onto one page without it feeling fuller than the pie did. SAY turns the title into a message and the comment into an action.

What changes for the decision is everything. In stage 1 no decision was taken. In stage 3 the board sees within the first minute that revenue is not an issue and the Service margin is – and the first question is not "how much?" but "why?". The value itself is rarely needed. What is needed is the variance – and a title that says what it means. Same numbers, same meeting, a different outcome.

The notation is not the goal but the means. We work in line with IBCS® and flag points of debate as such; what the standards prescribe in detail is described in What is IBCS?. What matters is the step before: the question about the decision, from which measure, comparison and threshold are derived – the chain set out in From decision to KPI.

The rules as a checklist

The following seven rules come from our report reviews. They apply to every page of a management report, whatever the tool.

The purpose question. What are these numbers supposed to tell us, and what are they for? Pages nobody can answer that for are removed.
Variance, not value. The value itself may not be needed at all, only the variance – as an amount and in percent, with a sign, plus as well as minus.
Target as the baseline. For measures with a target, the baseline is the target, not zero; the actual appears as a variance from it. Degree of achievement instead of absolute figure.
Time runs left to right. Prior year – actual – budget, in that order, on every page; columns in chart and table congruent.
Threshold for attention. Variances between −5 % and +5 % get no arrow and no colour. Attention is scarce and belongs to the outliers.
One page per unit. Every division, every company, every region gets the same page with the same layout. Standardise, then scale.
Message in the title. Main title as a sentence, below it the period and the unit. The comment repeats no number that is already in the chart.

Then there are the small rules you only miss when they are absent: absolute figures without decimals, percentages with one; data labels on bars yes, on lines no; scales start at zero; a uniform date format; an icon in the header that says whether the page is a dashboard (glasses), a report (page) or a working report (hammer). And the rule above all of them: analyse in detail, present the big picture (Fischer, in Mehlfeld et al. 2018, p. 12).

From practice

I did not take the rule "target as the baseline" from a book but from a rebuild in a logistics environment. I had built a divisional cockpit: one page per unit, same layout, with volume, quality, on-time delivery and the three most frequent errors of the month. The first version showed the values – shipments, error rate, share of on-time deliveries – each next to its target. In the meeting, people talked about numbers: whether the volume was right, whether the previous month had been calculated correctly. Then we made the target the baseline and showed only the variance, with a sign and a threshold above which it is flagged. From the next meeting on, the team leaders talked about causes instead of numbers. The data was the same; the page had simply stopped showing the value.

That comprehensibility is not a matter of taste is shown by an example from the corporate world. Weber, Bramsemann, Heineke and Hirsch describe how a large airline group abolished its value-based top measure again and replaced it with a simple difference between EBIT and cost of capital. The reason given in the practice statement: measures that are hard to understand are not fully taken into account in decisions and are not accepted as a yardstick for one's own performance (Weber et al. 2017, p. 226). For reporting, the same authors name seven design dimensions – purpose, recipient, object, cycle, content, type and medium – and purpose comes first (Weber et al. 2017, ch. 6.2). What applies to the measure applies to its presentation: a page that first has to be explained will not be taken into account in the meeting.

The next step

Tomorrow, take one page from your current monthly report – the one that took up most of the discussion at the last board meeting – and go through the seven rules. Count how many sentences in the comment repeat a number that is already in the chart. Check whether the title is a sentence. And ask the purpose question: which decision is this page supposed to support? The reporting check available for download walks you through this review.

If the purpose question stays open for more than half of the pages, an outside view pays off. In a project review we go through your monthly report page by page – purpose, comparison logic, notation, comment – and write down which pages carry a decision, which ones need rebuilding and which can go. It takes a few days at a fixed price, and you receive a written second opinion with a before-and-after for the three most important pages. Where the rebuild goes deeper because reference values or the data model are missing, a scoping sprint with a decision-ready target picture follows.

Sources

IBCS Association (2021): IBCS® Standards 1.2. © IBCS Association, www.ibcs.com, CC BY-SA 4.0. The rule families SAY, UNIFY, CONDENSE, CHECK, EXPRESS, SIMPLIFY, STRUCTURE (SUCCESS) are described there.
Hamid, S. (2023): The Ultra Guide – Storytelling & Presentations for Finance Professionals. Self-published (SoufBP).
Mehlfeld, T.; Schneider, C.; Stahl, K.-U.; Wiener, A. (eds.) (2018): Reporting- und Business-Intelligence-Werkzeuge für den Controller. Including: Fischer, D., Zehn Regeln für Controlling-Erfolg, pp. 10–19.
Weber, J.; Bramsemann, U.; Heineke, C.; Hirsch, B. (2017): Wertorientierte Unternehmenssteuerung. Konzepte, Implementierung, Praxis-Statement. 2nd edition, Springer Gabler, Wiesbaden.
Kempter, P. (2021): Review rules for management reports (internal checklist, Digital Controlling).