When looking at improving your business and its performance, it is important that your systems and processes are in order and providing the information that you need promptly and reliably so you can make informed decisions.
Most business owners are familiar with the basic financial reports they should be getting on a regular basis, but many are less familiar with the different management reports available that could help their businesses increase performance and/or profitability.
Management reporting can take many different forms from high level dashboards to detailed departmental profit and loss (“P & L”) statements. Management reporting is an important tool to help management make good decisions. However, you want to make sure you are getting the right reports that your business needs to drive strategic decision-making.
There are several factors to consider when designing the management reporting for your business:
Is the information provided relevant?
Management reports can contain a lot of different information, so it is important management is receiving information that is relevant to them. If managers have control over their costs, are they receiving a detailed P & L statement showing them the performance of their department compared to budget? It is important to talk to managers about the information that they would like to see on a regular basis. Would the Sales Manager benefit from seeing the company’s top ten customers for the month?
How frequently are management reports being provided?
You may need to review how often management reports being sent out and is this often enough? If managers are only receiving reports at the end of the month, would they benefit from receiving a weekly snapshot? In addition to this, are monthly management reports being received close to the end of the month or is it taking a long time for the finance team to produce these?
Is the format of the management reports useful?
It is important to consider the people who are receiving the reports so that you can include information that everyone will find useful. Some people like to read detailed P &L statements with many different line items and others would prefer to see graphs and other visuals to highlight the information that is important.
