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3 Steps on Setting up Management Reports for your Business



Imagine the impact on your business if there was no more guessing about where your company stands; if you had monthly financial reports you could trust; and peace of mind about your business’s financial health.

You might be thinking that’s too good to be true, but if you set up management reporting, this is all possible. With a little work up front, you can have detailed reports on the drivers of your business’s performance… both good and bad.  

What are Management Reports?

All CEOs have a myriad of things to accomplish every day, projects, process, inventory, etc. depending on the industry you are in. To truly have a handle on your business, management reporting is required.

Unlike financial reporting, management reports provide actionable insight into things like; what is driving sales, who your most profitable customers are and how you can increase staff productivity.

Setting up management reports is a 3 step process. Step 1: Start with the end in mind. Step 2: Create goals and a budget so you can compare your actual against your goal. Step 3: work backwards from there and create custom fields, queries and filters in your accounting system to make it easy to generate management reports.

Before we get into how you can set up these reports for your business lets define what management reports are.

Step 1: Starting with the End in Mind

The first step in creating management reports is starting with the end in mind. Before you start producing reports you think you need, you should ask yourself questions in order to find out what you really need.

  • What are the key drivers of your business?
  • How do you define success?
  • What do you need to attract customers?
  • How do you know if you are pricing your jobs right?
  • Do you know when to hire/fire employees?

The answers to these questions help define critical success paths for any business.

Step 2: Setting Goals and Creating a Budget

After you determine the drivers of your business, the next step in the process is setting goals and creating a budget for your company. Creating goals and a budget that you can compare against expectations can separate the best companies from the ones that are just getting by.

When GrowthForce takes on a client they often ask us how we think their business is doing. We look at their P&L and say “it depends… what did you expect was going to happen?”

Some companies think if they have $100k in profit it’s the end of the world. They were used to seeing million-dollar profits and the company’s investors aren’t going to be happy with a $100k. On the other hand, we have companies who say “I’ve got a $100k! That’s amazing.”

It really depends on what your expectations are, which helps determine your budget and goals. Creating a forecast, budget vs. actual, allows you to analyze specific areas of the business, i.e. sales, labor expense, indirect vs. direct, and helps in achieving your company’s goals.

The forecast then needs to be entered into your software, i.e. QuickBooks, and set your reporting format to provide the variance analysis you need to effectively manage your business.

Step 3: Getting the Right Management Reports for Your Business

The final step is determining what type of management reporting your company needs. 

Reports cost money. They take people’s time to create and it takes other people’s time to review them. Sometimes reports get generated because someone asked for them but no one ends up looking at them and they aren’t helping make decisions. Making sure the management reports that are created serve a purpose for your organization is vitally important to avoid wasted time and money.

Your business needs can change and therefore, your management reporting requirements. Your business goes through many changes in sales, people, customers, etc. and you need to assess the reports that you are producing.

First, ask what reports are you generating? Then answer these questions:

  • Who is getting them?
  • What is the frequency of the report?
  • Does the person who gets the report know what to do with it?
  • What decisions do you make with the report for the running of your company?

The goal of management reporting is to provide insight into your business including helping you know where to focus your attention.

Creating Management Reports for Your Business

Some CEOs think that financial reporting is enough to effectively run their company. However, financial reporting does not provide the actionable financial information you need to make more informed strategic decisions. To drive performance of your people, to understand profitability of your customers, to analyze pricing and your marketing spend… you need to develop a management reporting package.

GrowthForce specializes in creating custom management reports that companies need in order to increase productivity and foster growth. If you don’t have time or advanced knowledge to set up management reports for your business, GrowthForce is here to help. We take away the guesswork working closely with the CEO and designated parties when creating and producing management reports.

GrowthForce provides monthly financial and management reports you can trust to run your business and maintain your books to help solve problems and issues when they arise. We have a dedicated accounting team of bookkeeper, staff accountant and accounting manager to produce financial and management reports for each company. Let us help you set up custom management reports for your business so you have peace of mind about the future success of your company. 

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