Management reporting: the basis for its compilation

Management reporting is a document reflecting the main processes that the enterprise carried out in the reporting period. And each organization has the right to independently determine the specific constituent elements of such a document. Mainly, reporting is focused on its users, and the content depends on their requirements and the type of information that interests them.

However, as in the preparation of any document at the enterprise, there are basic principles on which management reporting is based. First of all, it must meet the principle of simplicity. Do not overload the document with unnecessary and unnecessary information for a particular user, it is necessary to include only important indicators. In addition, its size should be clearly defined, for example, one sheet of A3 format . This will also help to select the most interesting and informative facts. But the main thing: management reporting must obey the principle of efficiency, that is, its content should allow the user to take effective measures to improve the organization's activities. Simply put, the information provided should be timely.

Regular drawing up of such document will allow the head to be assured of efficiency of the further functioning of the company, as the personnel will act according to the developed instructions. In addition, the specialist is required to perform all the work to complete the report within the prescribed period. In this case, all information should be clear to the manager of the specific link for which it is intended. Correctly drawn up and well-written management reports fully reflect the activities of the enterprise and does not provoke the emergence of additional issues.

Since the management personnel of the enterprise can determine the content of this document, the form of its provision is also chosen at its own discretion. Conditionally, there are three ways to display information: graphical, textual and in the form of a table. As a rule, the expert relies on the user. For example, for a bookkeeper the most convenient and understandable is a tabular report, and all corrections and explanations can be submitted in the form of a text note. While it is easier for an investor or an analyst to assess the state of affairs using graphs.

Separately, I want to talk about the timing of reporting, since this factor determines its relevance, and, consequently, the timeliness of decisions taken. So, usually a division into short- and medium-term accounts is used, and there is also a periodic one. The latter involves the display of indicators that allow the development of specific activities for a long time, that is, to determine the company's strategic goals.

The document that most fully reflects the dynamism of the enterprise is short-term management reporting. Its example is in the form of daily and weekly collections of indicators, on the basis of which they develop specific activities for the next period. The main users at this level are middle managers.

Medium-term management reporting is compiled on a monthly basis. It contains not only the indicators for the past period, but also the forecast values of the future activity. It is provided mainly to the management team, as they can decide on the need to introduce some adjustments to the production process. Such a document can provide significant assistance to the company and uniquely positively affects the financial result. After all, managers and managers see what to expect from the future period while maintaining the previous positions.