As a business owner, it’s essential that you measure your financial results and key drivers in your business. Otherwise, you can’t implement meaningful improvement strategies and achieve your business’s goals.
Essentially management reporting is vital to a successful business. By understanding your business, it will be easier to reduce your working hours and make more money. Coleman Financial Group offers business coaching as part of our service offering, incorporating management reporting.
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Your business coach should have a system in place to create consistent reports that can be easily understood by you. Your coach may use a hardcopy system or software to do this. It is better to have advanced reporting systems such as software and cloud-based systems for time efficiency and convenience.
Your monthly management report will provide a snapshot of your results. Financial reports are included to ensure you understand your financial position and have accurate and current information to base your decisions on.
This snapshot of your results essentially forces you to take time out from working in your business. This gives you a perspective of your financial position and ascertains the best measures and best steps for improvement.
By providing monthly reports, our management team gives you current and accurate data to base your decisions which is key to improving your business.
You may be wondering which one is better financial or management reports? Financial reports and management reports may seem similar, but they are different.
Financial reporting just highlights the financial reports of a business such as a cash flow statement. Financial and management reports both include financial documents, the difference is management reports can include more information such as operational reports.
Coleman Financial Group uses more of a financial reporting system for management reports. Our financial management reports are curated by using the financial information we obtained as a result of being your accountant and business coach. Through creating financial reports we can highlight areas that are in need of improvement.
In your initial meeting with your accountant they will:
Determine the five most important Key Performance Indicators (KPIs) for you to measure
Create your custom management report
Ensure you understand how to interpret your management report each month
Identify the best way to collect key data for your report
As mentioned above in goal setting, KPIs are an important part of management reporting. KPIs provide a clear idea of how the business is operating by helping measure the goals and performance.
KPIs show stakeholders what is working and what isn’t working. Without this data, your report can’t be based on facts.
They also assist everyone in the business to see if strategies are effective and if the business is heading in the right direction. KPIs are the best kind of monitoring that a business can do.
Ultimately there is a lot of data that goes into your management reports, but only the important data should be used. The KPIs usually included are related to - effectiveness, quality, budget & timeliness.
Without a management report, your business’s management has data flying in from all directions, making it challenging to choose important pieces of information for meeting your business targets.
Each business is unique and as such your accountant should cater to your personal needs and customise your management reporting accordingly.
Ultimately your business’s management reports should be easy to read and most importantly easy to understand.
It should be visually appealing. Your accountant’s management reports are meant to be easily deciphered at a glance.
Your management reports should have clear and defined goals and objectives. In order to help your business grow it is important to understand what is and isn’t working and how to improve and reach those goals that you have set for your business.
All the information in relation to any data analysis and any strategies contained in management reports are there to aid your business in achieving its objectives. That is why your report will outline your business’s goals at the beginning of the report.
By outlining the business’s goals there is a point of reference for the following information in the management report, allowing stakeholders to understand how the business is aligning its strategies to its long-term goals helps gain business intelligence.
The goals will then lead to how KPIs are tracked and what performance factors need to be part of the management report.
It is also important to remember as your business changes so will your management report. This may result in removing or adding information to ensure your management report stays current.
Establish KPIs for your business and set achievement targets
A personalised management report to regularly measure your performance
A visual dashboard summary of multiple reports, so you can easily and quickly understand your results
Improve your financial awareness, you will know what you should measure and how to measure it
Implement best practice monitoring to enable better decision making
Creating a benchmark to compare future results against
Designated time each month to discuss your financial results with a senior team member
Measure your actual results against your targets
Understand the factors that impact your results so you can develop strategies to maximise your results
Set the direction of your business and key areas to focus on
Identify important trends in your business
See the influence your results have on your targets
Each month your accountant will send your management report and make contact to discuss the results, identify areas for improvement, and set tasks to ensure you’re on track to achieve your goals.
If you aren't measuring your financial results and the key drivers of your business, you can't properly manage them or apply crucial improvement strategies. By understanding your business on a monthly basis, the easier it will be to make more money or reduce your working hours.
Having accurate and current data to base your decisions on is key. Your accountant will help you to better understand and interpret your numbers and enable your success. Your accountant will also make recommendations.
6 min read
Nathan : 23/01/23 12:15 PM
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Nathan
