For those who run businesses, tracking KPIs and making sense of your numbers can require a ton of work, but when developing a robust management report, the effort is always outweighed by the results.
Understanding how your business is tracked through management reporting can help you gain more control over your business. Staying close to your key business metrics will help you create plans so you can navigate your business into future territory.
In our ultimate guide to management reporting, we'll cover everything you need to know, including the types of management reports at your disposal, why management reporting is essential for future decision-making, how to create a management report for your business and why management reporting software, such as Fathom, is a vital tool to for efficiency and effective, higher quality reports.
Management reporting is a type of business intelligence presented to management-level staff within your organisation.
The process of creating a management report often involves employees consolidating and analysing data from different sources and using it to make a detailed, clear overview of business performance, which, once complete, they then submit to their managers.
Management reporting is an integral component of business operations because it helps businesses measure their performance guided by specific key performance indicators (KPIs) and compare their performance against their nearest competition.
All aspects of a management report can be decided upon internally, such as deadlines and timeframes, content inclusions and report length, and the format in which they're delivered. As management reports contain financial and proprietary information, they are confidential documents for use internally only.
Presenting management reports to your business leaders can showcase areas within your business that need to be improved upon and highlight patterns and trends so sound conclusions can be made quickly. From here, leaders have a clear picture of the business's health, and critical operational and strategic business decisions can be made based on the performance insights contained within the report. (Learn more about what is financial analysis.)
There are some types of management reporting you could present to your senior executives to show how each division is meeting KPIs for the month, quarter or year.
The following management reports are essential in driving your business forward:
Analytical managerial reporting involves examining and assessing the effectiveness of your business strategies.
During the process of collating data for the report, business divisions can present quantitative data to crunch the numbers and qualitative data as a way of explaining the reasoning and logic.
Implementing analytical reports within your business can lead to improved innovation and constructive, strategic decisions.
An internal report is typically prepared within a business to relay the performance of plans or projects within business departments.
Internal reports can effectively track the progress or status of activities assigned to team members, measuring how productive business workflows are.
Operational reports monitor the performance of different business metrics with various intentions, such as:
Operational reports can help uncover efficiencies and inefficiencies within your business and are often created at monthly, quarterly and yearly intervals.
Suppose you're looking to create a management report and need help figuring out where to start. In that case, Fathom has sample reports that you can use as inspiration for visually appealing, comprehensive management reporting.
The importance of management reporting must be considered, as it is critical to understanding the factors that may be impacting how your business functions.
Management reporting can help business leaders to have a better understanding of KPIs and be able to set goals around performance.
Management reports are vital to decision-makers within your business as they'll be able to draw conclusions based on sound, accurate data insights quickly, and this will help them to make smarter decisions about the business.
Driving necessary changes within your business, management reporting can influence the formulation of strategies that aim to improve your performance, efficiency, profitability and growth.
A management report is an analytical tool to assist managers and business leaders in assessing the performance of many aspects of the business.
Management reporting contains many benefits for business advisors, management-level staff and CFOs, including:
Effective reporting can be a powerful tool in driving improvement within your business.
For effective reports that give business leaders everything they need to see, it should include the following:
Check out our webinar to dig deeper into building an effective custom management report with Fathom.
Although there isn't a one-size-fits-all management reporting process, there is a series of steps you should follow in gathering, analysing and presenting your business data in the form of a management report.
The management report you produce after following these steps will help leaders make some forward-thinking calls about what trajectory your business will be taking.
Here are some of the key steps in the management reporting processes you can follow:
Start with setting the specific strategic goals you're trying to achieve through your management reporting, and understanding what results you will be looking for.
You'll also need to set measurable KPIs to benchmark your business success in alignment with overall company goals.
The next step is collecting the necessary information to track your success and progress towards achieving those goals. Focus on picking the sources of data you need to tell the big picture.
Management reporting systems are a valuable tool in this instance, as they'll allow you to automatically connect all your data sources with the click of a button. More on this later!
There are a few points to this. You'll need to think critically about your management report's overall structure and content. What does your business leadership need to know? What do they need to do with the information contained within your report?
Here are some essential elements that should be contained within your report:
Now you've built up some hard data, you'll need to tell the story so its intended audience can easily understand it. Contextualising this data with a narrative backed by a comprehensive dashboard will be the best way to convey your insights.
Additionally, you must think about the right visuals to engage your business leaders. A simple graph or bar chart with the help of a management reporting system can be an engaging way to communicate your findings.
Once your management report has been distributed or presented to business leaders, they can digest the results, go away and outline their next steps and create action items to move the needle forward.
It is always important to encourage a culture where data is at the heart of your business, and a management report can help empower leaders within your business to embrace the power of business data, and this will highlight the value of your efforts.
The management reporting process should always be dynamic and iterative, with the information and insights gathered by the report feeding into your ongoing planning and decision-making.
Management reporting best practices can help you to enhance the quality of your reports. A well-crafted report that maximises its impact can make all the difference to how your managers respond and, subsequently, how informed and strategic their recommendations will be.
Following these management reporting best practices can include:
There are many key differences between a management report and a financial report.
A financial report is a retrospective look into your financial performance over the last few weeks, months or years. Financial reports consist of your financial data within a profit and loss statement, balance sheet and cash flow statement. These high-level external reports are a legal requirement that creates a broad snapshot of your business's financial health. Financial management reports are often presented for external use to banks, other lenders and investors.
On the other hand, a management report is an estimation of your business's future financial performance and focuses on both your financial and operational performance. Unlike a financial report, which is primarily created for external stakeholders, a management report is a non-mandatory document that is prepared for internal usage only and is aimed at management-level staff members.
Management reporting software (a management reporting system) can cut out the time spent assembling management reports manually.
A management reporting system connects directly with your business data sources, unlocking the power of automation so you can focus on data analysis and provide valuable insights to your business leaders.
Having a management reporting solution can take away the effort of repetitive, manual tasks at risk of human errors, so you can share business results in a clear, compelling way using accurate real-time data.
The beauty of this is that reports can be presented even when you're not sitting face-to-face with your business managers. Please read our article, presenting Fathom's interactive management reports remotely, for more information on how you can create visually engaging, up-to-the-minute PDF reports and deliver them remotely.
A leading management reporting system should contain best-in-class features to make your life easier.
Fathom's features are designed to put your management reporting on autopilot:
Learn more about Fathom's management reporting software, which is trusted by over 75,000 businesses worldwide.
Fathom is great management reporting, simplified. Business advisors, CFOs and business managers alike rely on Fathom's fast, visual and flexible capabilities for their management reporting needs.
Start your free 14-day trial with Fathom today, completely credit-card-free, and experience our powerfully simple management reporting software for yourself.