How to improve your Management Reporting…
Why does the management reporting processes fail?
Management Reporting is the regular provision of information to decision-makers within an organisation to support them in their work. i.e. these reports are designed to be used to analyse and facilitate strategic and operational activities in the organization.
i.e. The purpose of management reports is to drive informed (good) decisions.
Management Reports are generated by an information management systems – usually just the accounting system – however ideally reports are constructed by referring to three primary components: technology, people (individuals, groups, departments), and data/information.
Despite most businesses now having electronic accounting systems, and increasingly prolific data available, all too often bad decisions are made:
- decisions that waste money
- decisions that delay activity and lose opportunities
- decisions not to act (maintain the status quo) when innovation is required
I could go on and on and on…
Interestingly, a recent LinkedIn survey revealed these reasons as to why management reports fail to deliver good decisions:
- Lack of management guidance (strategic) – 37% of respondents
- Weak and unclear processes – 27% of respondents
- Culture (limited focus on finance) – 20% of respondents
- Inadequate staff – 10% of respondents
- Poor IT infrastructure – 6% of respondents
My take on this is 64% of respondents should be able to address their own issues – or at least begin to make a start!
I sometimes reckon that bad managers are like bad drivers – NOBODY ever says – “Oh yes, I am a terrible driver”…
Nor do managers ever ‘fess up’ to being terrible at management!
Why are these people (accountants in this case as it was on an accounting forum) WAITING?
And what are they waiting for?
If they know the management reporting process is broken, and they believe that the two biggest reasons they are failing at their jobs are ‘Lack of guidance’ and ‘Weak processes’ then stop whining, take some initiative, and do something about it – everyone will benefit.
If you are stuck for ideas on where to start, see some of these previous blogs:
Tips if you lack management guidance – Setting Objectives – a 5 step, quick and easy approach
Tips if you are not sure what to report 3 Ways to Pick Great Measures
What activity can you initiate that will improve your management reports?
It might be as simple as converting them to a dash-board or removing some of the “vanity metrics”
About the Author
Eve Blackall the small business answer to The Supernanny.
At Smart Accounting you work one-on-one with Eve who has already assisted hundreds of business owners increase cash-flow, grow profits, and ensuring businesses fetch the highest price when it comes time to sell.