Financial transparency has become, beyond a legal obligation, a key governance issue for companies of all sizes. In a context where the expectations of investors, partners, employees, and customers are increasingly demanding, the communication of a company’s financial data directly contributes to its success. The latter strengthens the trust of third parties, contributes to the company’s performance, and ensures its compliance .
As Benoît DELAUNAY points out in the New Notebooks of the Constitutional Council, ” transparency has become a virtue that has begun to be demanded of businesses. Among the factors identified to explain its emergence are the development of communication technologies, the evolution of organizations, and the intervention of the legislature .” This development shows that financial transparency is now a strategic imperative.
In this article, SBA Compta , your digital accountant , explains what financial transparency is , why it is essential to the development of your business and how to adopt a management approach that promotes it.
What is financial transparency?
Financial transparency involves making a company’s financial information accessible and understandable to all stakeholders (investors, employees, customers, regulators). This involves making financial statements public, but also explaining the processes and decisions that serve to implement the company’s strategy.
The aim is to provide a clear and honest view of the financial situation, thereby strengthening stakeholders’ confidence in the organization.
Why is financial transparency crucial for your business?
Financial transparency in a company is much more than a legal obligation.
1. It builds trust with your partners and customers
Financial transparency is a sign of trustworthiness. Demonstrating that you manage your finances reliably and responsibly helps you build trust with your business partners, investors, and customers.
2. It improves the internal management and performance of your company
By sharing financial results with your teams, you create an environment where everyone understands the company’s economic challenges and their contribution to the company’s profitability. Good financial management, accompanied by clear communication, allows you to make more informed decisions and manage your business effectively.
3. It attracts investors and top talent
Financial transparency can be a valuable asset in attracting investors. If you communicate transparently about your results, strategy, and goals, you inspire trust and strengthen your company’s credibility.
Additionally, transparent financial management can help attract talent looking to work in a reliable and responsible entity.
4. It allows you to comply with regulations and reduce legal risks
Financial transparency is now a legal requirement in many sectors.
For example, from 2026, European Directive 2026/970 on pay transparency will require companies to publish precise information on pay gaps between men and women.
The Sapin laws, which initiated significant progress in transparency, are a good example. Law No. 93-122 of January 29, 1993, on the prevention of corruption and the transparency of public procedures, modernized economic and public relations. In 2016, Law No. 2016-1691 reinforced these advances by aligning French legislation with the best European and international standards. It imposes transparency obligations on companies, such as the publication of accurate financial information and the implementation of internal controls, thereby reducing the risk of sanctions and improving governance.
Additionally, measures such as the Country by Country Reporting (CbCR) adopted in 2017, require companies to provide detailed data on their turnover, profits, taxes paid, nd number of employees by country. This reporting helps combat tax evasion and ensure a fair distribution of taxes worldwide.
Finally, commercial companies are required to publish their annual accounts, which contributes to financial transparency between economic players. At SBA Compta, we support our clients in complying with this requirement by ensuring the necessary financial documents are filed within the required timeframe with the commercial court registry.
However, micro-enterprises – within the meaning of Article L123-16-1 of the French Commercial Code – may request confidentiality of the accounts filed and small businesses may request confidentiality of their income statement.
Failure to comply with the obligation to file annual accounts on time may result in financial penalties and, in some cases, criminal prosecution. These penalties are intended to ensure financial transparency and protect the public interest in economic information.
How to highlight your company’s financial transparency?
Financial transparency with various stakeholders is essential for building trust in your organization and maintaining a strong reputation. Whether with your customers, suppliers, employees, or government agencies, a clear commitment to transparency demonstrates your company’s strength, accountability, and professionalism.
Here are the keys to highlighting this transparency with your various contacts.
1. Transparency towards your customers a guarantee of trust
Customers seek to partner with reliable and sustainable businesses. By displaying financial transparency, you create a climate of trust that can foster long-term loyalty and commitment.
- Display your prices clearly and transparently: publish your prices in detail, without hidden costs, and explain your pricing choices (cost reduction, ethical choices, etc.).
- Communicate your business practices: Make sure your customers understand your pricing methods, any discounts you offer, and the impact of production costs on your final prices.
- Share financial results in an accessible way : If you deem it relevant, share financial reports or performance summaries with your important clients, so they can see the stability and growth of your business.
2. Transparency with your suppliers a balanced and responsible relationship
Suppliers are essential partners in the success of your business . Transparent financial management is key to building a relationship based on trust and honesty.
- Meet your financial commitments: Be specific in meeting payment deadlines and communicate quickly and proactively if you anticipate a delay.
- Share your budget forecast . hHennyou anticipate changes in your financial needs, such as a decrease in purchasing volume or a change in strategy, inform your suppliers to avoid misunderstandings and preserve the business relationship.
- Negotiate transparently:Be open to discussing prices and commercial conditions by explaining your motivations (purchasing volumes, economic situations, etc.).
3. Transparency towards official bodies compliance and integrity
Complying with financial standards imposed by public authorities is not only a legal obligation but also a way to strengthen the credibility of your company.
- Comply with tax regulations : Make sure you report all your tax information accurately and on time, particularly regarding VAT, corporate taxes, etc.
- Implement clear audit practices: To reassure regulators and external partners, demonstrate that your company follows strict processes for verifying and ensuring the transparency of financial data.
- Publish accessible financial reports: Share detailed financial reports with relevant authorities, particularly in the event of an audit or assessment. This reinforces your image as a responsible company.
- Subscribe to a tax compliance review (TCR) to demonstrate your good faith with the tax authorities. The TCR mission allows you to be proactive in ensuring financial transparency with the tax authorities and reducing the risk of tax audits.
4. Transparency with your employees is the key to motivation and commitment
Internal financial transparency within a company can be a lever to strengthen team commitment and trust. It also contributes to better collaboration and understanding of the company’s challenges.
- Share the company’s financial goals and engage employees with a variable compensation policy : Inform your employees of the company’s financial results and objectives. You can also develop a variable compensation policy that engages employees in the company’s results: target-based bonuses, profit-sharing, etc.
- Explain budgetary decisions: When making important financial decisions, such as cost-cutting or reorganization, explain the reasons for these choices to your teams so they understand and adhere to the decisions.
- Engage your employees in the transparency process: Hold regular meetings to discuss the company’s financial situation, challenges encountered, and proposed solutions. This approach demonstrates your commitment to including your employees in the company’s strategic vision.
5. Financial transparency in social and ethical reporting
Increasingly, consumers, investors, a nd stakeholders are demanding that transparency extend beyond numbers to ethical practices and corporate social responsibility (CSR).
- Publish detailed CSR reports: If your company implements corporate social responsibility actions, make sure to publish clear and honest reports on your environmental, social ,a nd ethical commitments.
- Adopt responsible business practices: Ensure that your business practices adhere to ethical principles, whether in managing supplier relationships or complying with environmental standards.
The pitfalls of too much financial transparency
Although financial transparency is particularly useful for building trust, excessive transparency can carry certain risks.
Revealing too much sensitive information can, for example, expose the company to competitive risks. Competitors could exploit this data to refine their strategies and weaken the company’s competitive advantage. Furthermore, too many financial details shared publicly can lead to increased external pressure, with performance expectations being unrealistic or misinterpreted by investors, customers, and other stakeholders.
Excessive transparency can also weaken the company’s position in sensitive negotiations or harm the perception of employees and partners, who could feel over-informed or even overwhelmed by overly detailed information.
Finally, exposure to strict regulations can make the company vulnerable to sanctions if certain information is misinterpreted or disclosed incorrectly.
It is therefore crucial to find a balance between the transparency needed to build trust and the protection of sensitive strategic information.
Conclusion
Financial transparency is much more than a legal or administrative requirement: it’s a true strategic lever for your business. By adopting an open and transparent approach, you can strengthen the trust of your partners, customers, and employees, while attracting quality talent and investors. Transparency also helps promote healthier governance and reduce legal and tax risks.
By anticipating legal requirements today and integrating this culture of transparency into your practices, you can build a stronger and more responsible business. Ultimately, financial transparency is an opportunity for sustainable growth and development for your company.
