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Management Reporting

Compliant with modern standards, reporting in a company constitutes an integral part of the broader field of management accounting. The complexity of controlling processes and creating detailed reports arises from the interdisciplinary nature of these activities. They encompass the verification of how financial resources are used, the division of responsibilities at the managerial level, and the attempt to identify the causes of unfavorable phenomena.

Effective management processes supported by comprehensive reporting are essential for building competitive advantages. They enable efficient decision-making with a high rate of success. They outline the planning direction and provide specific tools for dealing with sudden issues.

The procedures for creating management reports in a company need to be tailored to the individual nature of its operations. This entails the implementation of advanced IT systems and their configuration according to the company’s needs. This way, the chosen business entity can safely grow while avoiding pitfalls from all sides.

Managerial reporting includes activities such as:

  • Creating controlling procedures from scratch,
  • Needs analysis,
  • Cost and sales result compilation to determine the breakeven point,
  • Monitoring cash flows and ensuring financial liquidity,
  • Searching for cost optimization options,
  • Developing and monitoring budget execution,
  • Financial analysis of the company’s situation.

Main Objectives of Reporting in a Company

In brief, we can say that the creation of reports aims to establish substantive foundations for making the right decisions in specific circumstances. Processing incoming information is the basis of management. When ensuring reliable information for management, the focus is primarily on speed and precision. The dynamic business environment requires immediate responses to changing indicators.

Reporting also plays an extremely important role in improving internal communication structures within companies. A unified system for creating and conveying reports streamlines daily processes that lead all departments in the company toward a common goal. Standardization ensures clarity and comprehensibility of information in reports at various professional levels.

It’s also worth mentioning long-term objectives that guide a given entity towards new levels of efficiency in business. Systematic and comprehensive reporting in controlling builds trust with business partners. Financial transparency is the foundation for a company’s shares being listed on the stock exchange. The greater the stability and transparency of finances within a company, the stronger its market position.

So, let’s summarize the most important objectives to consider before implementing managerial reporting systems:

  • Improving decision-making processes in management,
  • Accelerating communication within the team and standardizing information delivery methods,
  • Providing a detailed insight into all corners of the internal financial system,
  • Enabling rapid response to issues based on real data,
  • Ensuring the correctness and adequacy of all information provided to management.

Determining Needs in Report Creation

All report generation procedures should closely align with the entrepreneur’s needs. In the initial implementation stage of a new reporting system, management, in collaboration with the controlling department, must outline their expectations driven by internal aspirations and sector-specific factors. Forming a team of analysts initiates an intense brainstorming session where criteria and conditions for effective reporting crystallize.

Subsequently, it’s necessary to proceed with the selection of the appropriate reporting standard, establish procedures for data acquisition and archiving, and standardize the content structure of the final report. This approach opens a new chapter for effective communication in the company, based on aggregated, highly precise information.

Determining managerial needs involves the following steps:

  • Situational diagnosis,
  • Preparatory work,
  • Team formation,
  • Criterias and aspects definition,
  • Selection of reporting standards,
  • Data collection and aggregation,
  • Report content development,
  • Report verification,
  • Communication.

How Does the Reporting Process Work?

There is no doubt that effective reporting and controlling processes in a company should strive for standardization. The completeness and detail of procedures translate into the creation of reports with high decision-making potential. Documents of this type are a key component of managerial decisions, the consequences of which extend to all departments in the company and set future development directions.

The reporting process includes, among other things:

  • Determining reporting periods and closing times,
  • Data aggregation,
  • Process of reconciling operational and financial data,
  • If there are discrepancies, the process of identifying differences and making corrections,
  • Data export to reporting tools,
  • Data analysis and verification,
  • Preparation of the reporting package (P&L, BS, CF, operational data, statistics),
  • Analysis of deviations from comparative data (budget, previous year),
  • Preparation of KPIs – key performance indicators,
  • Preparation of the presentation package,
  • Presentation and discussion of data.

Managerial Reporting Consulting

Delivering reports to management is a part of a complex FP&A reporting system. CFO Consulting specializes in designing and implementing personalized tools for companies, allowing them to improve management quality and strengthen their position in the market. Learn more about the comprehensive services of CFO Consulting in the field of reporting systems and management reporting.