Financial and management reporting. Classification of management reporting according to the time characteristics of indicators

Management reporting is one of the most important sources of obtaining information about the company’s performance, based on a set of financial, sales, marketing, production and other indicators.

Information in management reporting should be economically interesting and actively used by managers, founders and business owners. The data disclosed in management reporting is necessary for the analysis of all activities. This helps to timely identify the reasons for possible deviations from the parameters set by the business strategy, as well as show reserves (financial, material, labor, etc.) that have not been used by the company until this time. The process of setting up and implementing management reporting can be divided into 7 stages.

Step 1. Diagnostics of the existing management system in the company.

This stage is necessary to analyze the organizational structure of the company; the format of process modeling is determined. If the company has business process diagrams and their descriptions, these documents are analyzed and the main problem areas that require optimization are identified.

Diagnostic goals	Search systems approaches to increase the efficiency of management reporting
Classification and analysis existing forms reporting	By presentation form - tabular, graphic, text; By business segments – procurement reports, sales reports, tax reports; By targeting of presentation - reports for management, reports for heads of the Central Federal District, reports for managers; By the volume of information - operational reports on current projects, investment reports, final financial reports, summary (master) reports; Content - comprehensive reports, analytical indicators, reports on key performance indicators KPI.
Improving the quality and reducing the time required to obtain the output analytical information necessary for the adoption of quality management decisions.	Analytical reports have high value when they can be received in short time and contain information in a form that best meets the needs of the employee who makes decisions based on this report.
Increasing the reliability of stored information.	To make decisions, you must rely only on reliable information. It is not always possible to understand how reliable the information presented in the reports is; Accordingly, the risk of making poor-quality decisions increases. On the other hand, if an employee does not bear official responsibility for the accuracy of the information entered, then with a very high degree of probability he will not treat the information with due care.
Increasing the analytical value of information.	A non-systematic approach to entering and storing information leads to the fact that, despite the fact that large amounts of information are entered into the database, it is almost impossible to present this information in the form of reports. Non-systematicity here means the input of information by employees without development general rules, which leads to a situation where the same information is presented to different employees in a different form from each other.
Elimination of inconsistency and inconsistency of information	If there is unclear clarity regarding the division of responsibilities and rights between employees to enter information, the same information is often entered multiple times in different departments of the company. In combination with a non-systematic approach, the fact of duplication of information may even be impossible to determine. Such duplication makes it impossible to obtain a complete report based on the entered information.
Increasing the predictability of obtaining a certain result	Decision making is almost always based on assessing information from past periods. But it often happens that the necessary information was simply never entered. In most cases, it would not be difficult to store missing information if someone assumed in advance that it would someday be needed.
Result	Based on diagnostics and decisions taken are being finalized job descriptions, existing business processes are reengineered, reporting forms that do not provide information for data analysis are eliminated, KPI indicators are introduced, accounting systems are adapted to obtain actual data, the composition and timing of management reporting are fixed.

Step 2. Creating a management reporting methodology

This stage is necessary for delegating authority in terms of drawing up operating budgets and determining the responsibility of specific financial responsibility centers (FRCs) for drawing up certain budget plans (segments of management reporting).

Goals and objectives solved as a result of the implementation of management reporting in the company:

• Establishing and achieving specific key performance indicators (KPIs);
• Identification of “weak” links in the organizational structure of the company;
• Increasing the performance monitoring system;
• Ensuring transparency of cash flows;
• Strengthening payment discipline;
• Development of an employee motivation system;
• Prompt response to changes: market conditions, sales channels, etc.;
• Identification of the company’s internal resources;
• Risk assessment, etc.

The composition of management reports depends primarily on the nature of the company's activities. As practice shows, the composition of management reporting (master report) usually includes:

• Cash flow statement (direct method);
• Cash flow statement (indirect method);
• Gains and losses report;
• Forecast balance (managerial balance);

Consolidation of budgets

The preparation of consolidated management reporting is a rather labor-intensive process. Consolidated financial statements treat a group of related entities as a single entity. Assets, liabilities, income and expenses are combined into common system management reports. Such reporting characterizes the property and financial position the entire group of companies as of the reporting date, as well as the financial results of its activities for the reporting period. If the holding consists of companies that are not connected with each other at the operational level, then the task of consolidating management reporting is solved quite simply. If business transactions are carried out between the companies of the holding, then in this case not everything is so obvious, because it will be necessary to exclude mutual transactions so as not to distort the data on income and expenses, assets and liabilities at the holding level in the consolidated statements. The company's budget policy needs to consolidate the rules and principles for eliminating VGOs.

For this purpose it is more expedient to use specialized Information Systems, for example, "WA: Financier". The system allows you to eliminate intra-company turnover at the level of processing primary documents and quickly obtain correct information, which simplifies and speeds up the process of generating management reporting, minimizes errors associated with human factor. At the same time, the reconciliation of intragroup turnover, their elimination, the execution of corrective entries and other operations are carried out automatically.

Example: Company A owns Company B 100%. Company A sold goods for the amount of 1,500 rubles. The purchase of this product cost company A 1000 rubles. Company B paid for the goods delivered in full. At the end of the reporting period, Company B did not sell the product, and it is included in its reporting.

As a result of consolidation, it is necessary to eliminate the profit (500 rubles) that the company has not yet received and reduce the cost of inventories (500 rubles). To exclude VGOs and profits that Company B has not yet earned. Adjustments need to be made.

Result of management reporting consolidation

Determination of key performance indicators (KPI – Key performance indicators)

The introduction of key control indicators allows you to manage financial responsibility centers by setting limits, standard values or the maximum limits of accepted indicators. The set of performance indicators for individual central financial districts significantly depends on the role of this center of responsibility in the management system and on the functions performed. The indicator values ​​are set taking into account the company’s strategic plans and the development of individual business areas. The system of indicators can take on a hierarchical structure, both for the company as a whole, and with detail down to each center of financial responsibility. After detailing the top-level KPIs and transferring them to the levels of the Central Federal District and employees, staff remuneration, etc. can be linked to them.

Monitoring and analysis of the execution of management reporting.

For the execution of budgets included in management reporting, three areas of control can be distinguished:

• preliminary,
• current (operational)
• final.

The purpose of preliminary control is to prevent potential budget violations, in other words, to prevent unreasonable expenses. It is carried out before business transactions are carried out. The most common form of such control is the approval of requests (for example, for payment or shipment of goods from a warehouse).

Current control over budget execution involves regular monitoring of the activities of financial responsibility centers to identify deviations in the actual performance indicators from those planned. Conducted daily or weekly based on operational reporting.

Final control of budget execution is nothing more than an analysis of the implementation of plans after the close of the period, an assessment of the financial and economic activities of the company as a whole and for management accounting objects.

In the process of executing budgets, it is important to identify deviations at the earliest stages. Determine what methods of preliminary and current budget control can be used in the company. For example, introduce procedures for approving requests for payment or release of materials from the warehouse. This will allow you to avoid unnecessary expenses, prevent budget failure and take action in advance. Be sure to regulate control procedures. Create a separate budget control regulation. Describe in it the types and stages of inspections, their frequency, the procedure for revising budgets, key indicators and ranges of their deviations. This will make the control process transparent and understandable, and will increase executive discipline in the company.

STEP 3. Design and approval of the company's financial structure.

This stage includes work on the formation of classifiers of budgets and budget items, the development of a set of operating budgets, planning items and their relationships with each other, and the imposition of types of budgets on the organizational units of the company’s management structure.

Based on the organizational structure of the company, a financial structure is developed. As part of this work, financial responsibility centers (FRCs) are formed from organizational units (divisions) and a model of the financial structure is built. The main task of building the financial structure of an enterprise is to get an answer to the question of who should draw up what budgets in the enterprise. A correctly constructed financial structure of an enterprise allows you to see the “key points” at which profits will be formed, taken into account and, most likely, redistributed, as well as control over the company’s expenses and income.

The Financial Responsibility Center (FRC) is an object of the company’s financial structure that is responsible for all financial results: revenue, profit (loss), costs. Final goal any central financial district – profit maximization. For each central financial district, all three main budgets are drawn up: a budget of income and expenses, a cash flow budget and a forecast balance (managerial balance sheet). As a rule, individual organizations act as central financial districts; subsidiaries of holdings; separate divisions, representative offices and branches of large companies; regionally or technologically isolated types of activities (businesses) of multi-industry companies.

Financial accounting center (FAC) is an object of the company’s financial structure that is responsible only for some financial indicators, for example, income and part of the costs. For the DFS, a budget of income and expenses or some private and functional budgets are drawn up (budget labor costs, sales budget). The main production workshops participating in unified technological chains at enterprises with a sequential or continuous technological cycle can act as digital financial institutions; production (assembly) shops; sales services and divisions. Financial accounting centers may have a narrow focus:

• marginal profit center (profit center) - a structural unit or group of units whose activities are directly related to the implementation of one or more business projects of the company that ensure the receipt and accounting of profit;
• income center - a structural unit or group of units whose activities are aimed at generating income and do not include profit accounting (for example, a sales service);
• investment center (venture center) - a structural unit or group of units that are directly related to the organization of new business projects, profits from which are expected in the future.
• cost center is an object of the financial structure of an enterprise that is responsible only for expenses. And not for all expenses, but for the so-called regulated expenses, the expenditure and savings of which the management of the Central Bank can control. These are departments that serve the main business processes. Only some auxiliary budgets are drawn up for central planning. The auxiliary services of the enterprise (housekeeping department, security service, administration) can act as a central protection center. A cost center may also be referred to as a cost center (cost center).

STEP 4. Formation of a budget model.

There are no strict requirements for the development of a classifier of internal management reporting. Just as no two companies are exactly alike, no two budget structures are exactly alike. Unlike formalized financial statements: a profit and loss statement or a balance sheet, management reporting does not have a standardized form that must be strictly followed. The structure of internal management reporting depends on the specifics of the company, the budget policy adopted by the company, the wishes of management regarding the level of detail of articles for analysis, etc. We can only give general recommendations on how to draw up the optimal structure of management reporting.

The structure of management reporting should correspond to the structure of the company's daily activities.

Classification of articles using the example of the Cash Flow Statement.

STEP 5. Approval of budget policy and development of regulations.

Budget policy is formed with the aim of developing and consolidating the principles for the formation and consolidation of indicators for these items and methods for their assessment. This includes: determination of the time period, planning procedures, budget formats, action program of each of the participants in the process. After developing the budget model, it is necessary to move on to regulating the budget process.

It is necessary to determine which budgets are formed in the company and in what sequence. For each budget, it is necessary to identify a person responsible for preparation (a specific employee, a central federal district) and someone responsible for the execution of the budget (the head of a department, a head of a central federal district), and set limits, standard values ​​or maximum boundaries for the performance indicators of a central federal district. It is imperative to form a budget committee - this is a body created for the purpose of managing the budget process, monitoring its execution and making decisions.

Step 6. Audit of accounting systems.

At the stage of development and approval of the composition of the company’s management reporting, it is also necessary to take into account that the classifier of budget items must be sufficiently detailed to provide you with useful information about the company’s income and expenses. At the same time, you need to understand that the more levels of detail are allocated, the more time and labor costs will be required to draw up budgets and reports, but the more detailed analytics can be obtained.

It is also necessary to take into account that as a result of developing a management reporting methodology, adaptation of accounting systems may be required, because To analyze budget execution, planned indicators will have to be compared with available actual information.

Step 7. Automation.

This stage includes work on selecting a software product, creating terms of reference, implementation and maintenance of the system.

Stages of formation and preparation of management reporting

Important aspects when preparing management reporting: forms and examples. Management reporting is one of the most important sources of obtaining information about the company's performance, based on a set of financial, sales, marketing, production and other indicators.

Information in management reporting should be economically interesting and actively used by managers, founders and business owners. The data disclosed in management reporting is necessary for the analysis of all activities. This helps to timely identify the reasons for possible deviations from the parameters set by the business strategy, as well as show reserves (financial, material, labor, etc.) that have not been used by the company until this time.

Below are 7 stages of formation and preparation of management reporting.

Step 1. Diagnostics of the existing management system in the company

This stage is necessary to analyze the organizational structure of the company; the format of process modeling is determined. If the company has business process diagrams and their descriptions, these documents are analyzed and the main problem areas that require optimization are identified.

Diagnostic goals	Search for systematic approaches to increasing the efficiency of management reporting
Classification and analysis of existing reporting forms	According to presentation form- tabular, graphic, text; By business segment– purchase reports, sales reports, tax reports; By targeting of presentation- reports for management, reports for managers of the Central Federal District, reports for managers; By volume of information – operational reports on current projects, investment reports, final financial reports, summary (master) reports; By content - comprehensive reports, analytical indicators, reports on key performance indicators KPI.
Improving the quality and reducing the time required to obtain output analytical information necessary for making quality management decisions.	Analytical reports are of high value when they can be obtained in a short time and contain information in a form that best meets the needs of the employee who makes decisions based on this report.
Increasing the reliability of stored information.	To make decisions, you must rely only on reliable information. It is not always possible to understand how reliable the information presented in the reports is; Accordingly, the risk of making poor-quality decisions increases. On the other hand, if an employee does not bear official responsibility for the accuracy of the information entered, then with a very high degree of probability he will not treat the information with due care.
Increasing the analytical value of information.	A non-systematic approach to entering and storing information leads to the fact that, despite the fact that large amounts of information are entered into the database, it is almost impossible to present this information in the form of reports. Non-systematicity here means the input of information by employees without the development of general rules, which leads to a situation where the same information is presented to different employees in a different form from each other.
Elimination of inconsistency and inconsistency of information	If there is unclear clarity regarding the division of responsibilities and rights between employees to enter information, the same information is often entered multiple times in different departments of the company. In combination with a non-systematic approach, the fact of duplication of information may even be impossible to determine. Such duplication makes it impossible to obtain a complete report based on the entered information.
Increasing the predictability of obtaining a certain result	Decision making is almost always based on assessing information from past periods. But it often happens that the necessary information was simply never entered. In most cases, it would not be difficult to store missing information if someone assumed in advance that it would someday be needed.
Result	Based on the diagnostics and decisions made, job descriptions are finalized, existing business processes are reengineered, reporting forms that do not provide information for data analysis are eliminated, KPI indicators are introduced, accounting systems are adapted to obtain actual data, and the composition and timing of management reporting are fixed.

Step 2. Creating a management reporting methodology

This stage is necessary for delegating authority in terms of drawing up operating budgets and determining the responsibility of specific financial responsibility centers (FRCs) for drawing up certain budget plans (segments of management reporting).

Figure 1. Sequence of stages in constructing a management reporting methodology.

Goals and objectives solved as a result of the implementation of management reporting in the company:

• Establishing and achieving specific key performance indicators (KPIs);
• Identification of “weak” links in the organizational structure of the company;
• Increasing the performance monitoring system;
• Ensuring transparency of cash flows;
• Strengthening payment discipline;
• Development of an employee motivation system;
• Prompt response to changes: market conditions, sales channels, etc.;
• Identification of the company’s internal resources;
• Risk assessment, etc.

Composition of management reports depends primarily on the nature of the company's activities. As practice shows, the composition of management reporting (master report) usually includes:

• Cash flow statement (direct method);
• Cash flow statement (indirect method);
• Gains and losses report;

Figure 2. Example of a management reporting structure.

Figure 3. Relationship between the classifier of management reports and management accounting objects.

Consolidation of budgets

The preparation of consolidated management reporting is a rather labor-intensive process. Consolidated financial management reporting considers a group of interrelated organizations as a single whole. Assets, liabilities, income and expenses are combined into a common management reporting system. Such reporting characterizes the property and financial position of the entire group of companies as of the reporting date, as well as the financial results of its activities for the reporting period. If the holding consists of companies that are not connected with each other at the operational level, then the task of consolidating management reporting is solved quite simply. If business transactions are carried out between the companies of the holding, then in this case not everything is so obvious, because it will be necessary to exclude mutual transactions so as not to distort the data on income and expenses, assets and liabilities at the holding level in the consolidated statements. The company's budget policy needs to consolidate the rules and principles for eliminating VGOs.

Therefore, it is more expedient to use information systems. For these purposes, you can use the “WA: Financier” system. The system allows you to eliminate intra-company turnover at the level of processing primary documents and quickly obtain correct information, which simplifies and speeds up the process of generating management reporting and minimizes errors associated with the human factor. At the same time, the reconciliation of intragroup turnover, their elimination, the execution of corrective entries and other operations are carried out automatically.

Example of management reporting: Company A owns Company B 100%. Company A sold goods for the amount of 1,500 rubles. The purchase of this product cost company A 1000 rubles. Company B paid for the goods delivered in full. At the end of the reporting period, Company B did not sell the product and it is included in its reporting.

As a result of consolidation, it is necessary to eliminate the profit (500 rubles) that the company has not yet received and reduce the cost of inventories (500 rubles).

To exclude VGOs and profits that Company B has not yet earned. Adjustments need to be made.

Result of management reporting consolidation

Figure 4. Forecast balance (managerial balance).

Determination of key performance indicators (KPI – Key performance indicators)

The introduction of key control indicators allows you to manage financial responsibility centers by setting limits, standard values ​​or maximum boundaries of accepted indicators. The set of performance indicators for individual central financial districts significantly depends on the role of this center of responsibility in the management system and on the functions performed. The indicator values ​​are set taking into account the company’s strategic plans and the development of individual business areas. The system of indicators can take on a hierarchical structure, both for the company as a whole, and with detail down to each center of financial responsibility. After detailing the top-level KPIs and transferring them to the levels of the Central Federal District and employees, staff remuneration, etc. can be linked to them.

Figure 5. Example of using key company indicators.

Control and analysis of management reporting and execution

For the execution of budgets included in management reporting, three areas of control can be distinguished:

• preliminary;
• current (operational);
• final.

Target preliminary control- this is the prevention of potential budget violations, in other words, the prevention of unreasonable expenses. It is carried out before business transactions are carried out. The most common form of such control is the approval of requests (for example, for payment or shipment of goods from a warehouse).

Current control budget execution implies regular monitoring of the activities of financial responsibility centers to identify deviations of their actual performance indicators from the planned ones. Conducted daily or weekly based on operational reporting.

Final control budget execution is nothing more than an analysis of the implementation of plans after the close of the period, an assessment of the financial and economic activities of the company as a whole and for management accounting objects.

In the process of executing budgets, it is important to identify deviations at the earliest stages. Determine what methods of preliminary and current budget control can be used in the company. For example, introduce procedures for approving requests for payment or release of materials from the warehouse. This will allow you to avoid unnecessary expenses, prevent budget failure and take action in advance. Be sure to regulate control procedures. Create a separate budget control regulation. Describe in it the types and stages of inspections, their frequency, the procedure for revising budgets, key indicators and ranges of their deviations. This will make the control process transparent and understandable, and will increase executive discipline in the company.

Figure 6. Monitoring the implementation of planned indicators of management reporting.

Step 3. Design and approval of the company's financial structure

This stage includes work on the formation of classifiers of budgets and budget items, the development of a set of operating budgets, planning items and their relationships with each other, and the imposition of types of budgets on the organizational units of the company’s management structure.

Based on the organizational structure of the company, a financial structure is developed. As part of this work, financial responsibility centers (FRCs) are formed from organizational units (divisions) and a model of the financial structure is built. The main task of building the financial structure of an enterprise is to get an answer to the question of who should draw up what budgets in the enterprise. A correctly constructed financial structure of an enterprise allows you to see the “key points” at which profits will be formed, taken into account and, most likely, redistributed, as well as control over the company’s expenses and income.

Center for Financial Responsibility (FRC)– an object of the company’s financial structure that is responsible for all financial results: revenue, profit (loss), costs. The ultimate goal of any central financial institution is to maximize profits. For each central financial district, all three main budgets are drawn up: a budget of income and expenses, a cash flow budget and a forecast balance (managerial balance sheet). As a rule, individual organizations act as central financial districts; subsidiaries of holdings; separate divisions, representative offices and branches of large companies; regionally or technologically isolated types of activities (businesses) of multi-industry companies.

Financial Accounting Center (FAC)– an object of the company’s financial structure that is responsible only for some financial indicators, for example, income and part of the costs. For the DFS, a budget of income and expenses or some private and functional budgets (labor budget, sales budget) are drawn up. The DFS can be the main production workshops participating in unified technological chains at enterprises with a sequential or continuous technological cycle; production (assembly) shops; sales services and divisions. Financial accounting centers may have a narrow focus:

• marginal profit center (profit center)– a structural unit or group of units whose activities are directly related to the implementation of one or more business projects of the company, ensuring the receipt and accounting of profits;
• revenue center– a structural unit or group of units whose activities are aimed at generating income and do not include profit accounting (for example, a sales service);
• investment center (venture center)– a structural unit or group of units that are directly related to the organization of new business projects, the profit from which is expected in the future.
• cost center- an object of the financial structure of the enterprise, which is only responsible for expenses. And not for all expenses, but for the so-called regulated expenses, the expenditure and savings of which the management of the Central Bank can control. These are departments that serve the main business processes. Only some auxiliary budgets are drawn up for central planning. The auxiliary services of the enterprise (housekeeping department, security service, administration) can act as a central protection center. Cost center may also be called Cost center (cost center).

Figure 7. Design of the company's financial structure.

Step 4. Formation of a budget model

There are no strict requirements for the development of a classifier of internal management reporting. Just as no two companies are exactly alike, no two budget structures are exactly alike. Unlike formalized financial statements: a profit and loss statement or a balance sheet, management reporting does not have a standardized form that must be strictly followed. The structure of internal management reporting depends on the specifics of the company, the budget policy adopted by the company, the wishes of management regarding the level of detail of articles for analysis, etc. We can only give general recommendations on how to draw up the optimal structure of management reporting.

Figure 8. Scheme of interaction of budget forms using the example of the simplest budget model.

Classification of items using the example of a Cash Flow Statement

Figure 9. Execution of the cash flow budget (CF (BDDS)).

Step 5. Approval of budget policy and development of regulations

Budget policy is formed with the aim of developing and consolidating the principles for the formation and consolidation of indicators for these items and methods for their assessment. This includes: determination of the time period, planning procedures, budget formats, action program of each of the participants in the process. After developing the budget model, it is necessary to move on to regulating the budget process.

It is necessary to determine which budgets are formed in the company and in what sequence. For each budget, it is necessary to identify a person responsible for preparation (a specific employee, a central federal district) and someone responsible for the execution of the budget (the head of a department, a head of a central federal district), and set limits, standard values ​​or maximum boundaries for the performance indicators of a central federal district. It is imperative to form a budget committee - this is a body created for the purpose of managing the budget process, monitoring its execution and making decisions.

Figure 10. Enterprise budgeting planning phases.

Step 6. Audit of accounting systems

At the stage of development and approval of the composition of the company’s management reporting, it is also necessary to take into account that the classifier of budget items must be sufficiently detailed to provide you with useful information about the company’s income and expenses. At the same time, you need to understand that the more levels of detail are allocated, the more time and labor costs will be required to compile management reporting, budgets and reports, but the more detailed analytics can be obtained.

It is also necessary to take into account that as a result of developing a management reporting methodology, adaptation of accounting systems may be required, because To analyze budget execution, planned indicators will have to be compared with available actual information.

Step 7. Automation

This stage includes work on selecting a software product, creating technical specifications, implementation and maintenance of the system.

Must provide all users with the information needed to make decisions. Therefore, you need to decide on the list of management reports and their content.

It should be noted that this work, unfortunately, does not have any clear and unambiguous technology. We can say that developing management reporting forms is a kind of art.

After all, you need to be able to develop formats for management reports that, on the one hand, would truly contain useful information, and on the other hand, the cost of obtaining this information would be acceptable to the company's management.

By the way, questions about the relationship between utility and cost will arise throughout the entire project to establish and automate management accounting.

Thus, this article discusses all practical aspects associated with the development of a management reporting system. In particular, when developing management reporting formats, it is necessary to take into account the main characteristics that they must satisfy.

In addition, this article presents a classification of management reporting and indicators that may be contained in it.

Characteristics of management reporting

Management reporting can mainly be characterized only by qualitative requirements. Although some companies may use quantitative parameters.

Perhaps the most common quantitative characteristics management reporting is the number of pages in a management report. It is believed that one report should be placed on one page, otherwise it will be very difficult to analyze. True, it does not specify what page format we are talking about and what font.

In some companies that strictly followed this principle, I have seen reports printed on an A3 page, and in very small print. Yes, formally these reports were placed on one page, but they were very difficult to use.

In general, you should not apply this quantitative limitation so straightforwardly. If a management report is placed on two A4 pages, and, indeed, no data from such a management report is superfluous, then it is not at all necessary to print it in very small print in order to place it on one page.

Although quite often, upon closer examination of such long management reports, it turns out that they can quite easily be placed on one page. One company, for example, had a management report that, despite using very small font, barely fit on two pages.

Moreover, significant articles of the management report were not detailed enough, and less significant articles were presented with excessive detail. After a simple procedure (excessive detailing of non-essential items was reduced), the management report fit on one page without any problems, and it became much easier to use in practice.

Sometimes management reporting is made “large” because, just in case, the maximum possible detail is included in it. For example, such a management report item as “Revenue from sales” in the sales report can be printed with detail to groups, or with detail to a specific position.

It is clear that in the second case the management report can turn out to be much more cumbersome. By the way, to avoid such problems with visualizing management reporting, it can be viewed in in electronic format using a software product that, if necessary, allows you to expand a particular hierarchical indicator.

So, if we return to the consideration of the qualitative characteristics of management reporting, then among the most important we can highlight the following:

understandability;

significance;

reliability (credibility);

comparability.

Clarity of management reporting

It should be noted right away that knowledge of the purposes for preparing a specific management report can significantly increase its understandability for the user. The goals of preparing management reports should be determined when developing a classifier of management reporting.

So, it is obvious that management reporting should be understandable to users, but there is one important caveat. In order to understand management reporting, users must have certain knowledge. In particular, you need to know at least the basics of economics and finance.

Of course, company managers are not required to know in detail the methodology for generating management reporting, but they must understand the meaning of each indicator of the management report they use. This knowledge includes, among other things, knowledge of management accounting policies, since the values ​​of most management reporting indicators directly depend on it.

Therefore, as part of a project to establish and automate management accounting, training should be planned, including for company managers. By the way, the lack of training in such projects has a very negative impact on the final results, but, nevertheless, very little attention is paid to this issue.

Thus, the information contained in management reporting should be understandable to users familiar with the principles of management accounting and the basics of economics and finance.

The importance of management reporting

In addition to clarity, management reports must have another important property - contain meaningful information. It would seem obvious that management reporting is prepared for decision making, and not just for the sake of being. But nevertheless, quite often management reports are overloaded with completely unnecessary data.

Again, one of the reasons for such information overload in management reporting is the lack of necessary preparation and planning for the management accounting project.

In particular, the classification of management reporting is not thought out in advance, the goals of the reports are not determined, etc. As a result, it turns out that gradually almost all management reports are littered with completely unnecessary information. This means that it is unnecessary for this management report.

By the way, fans of adding to management reports additional information, so to speak, just in case, they can take advantage of the capabilities of software products that allow not all indicators to be displayed on the screen. On the one hand, you can immediately provide in the settings all potentially interesting indicators for a particular report, but, on the other hand, when visualizing it, only highlight some of them.

It should be noted that the significance of a particular indicator in management reports may depend on the period for which it is compiled. For example, in one company dealing road construction, the management apparatus required daily management reporting from its production units (DRSU - road repair construction sites), scattered throughout the region.

It is clear that remote objects require operational control. But, as it turned out when analyzing management reporting, among the indicators that were collected every day, no more than 30% were truly significant. Preparing all other indicators of daily reports was simply an ineffective use of the time of specialists working in DRSU.

So, the information contained in management reporting should be useful for decision making and help evaluate past, present and future events, confirm or correct past estimates.

Reliability (authenticity) of management reporting

The reliability of management reporting is also a completely logical characteristic, like the previous two. Although one of the differences between management accounting and accounting is that very scrupulous accuracy is not always required.

After all, sometimes it is much more important for a manager to receive a management report that is not absolutely accurate, but within the required time frame, than a report that is verified down to the last penny, but is late. This remark does not mean at all that accuracy does not matter at all for management accounting.

But the most important thing is that management reporting must reveal the real activities and state of affairs in the company and be free from significant errors.

There are certain conditions to ensure the reliability of management reporting:

truthfulness;

neutrality;

the predominance of essence over legal form;

prudence (conservativeness).

Truthfulness of management reporting

Truthfulness means that management accounts must truthfully reflect the transactions and other events on which they are based. Lack of veracity may be due to difficulties in identifying events and assessing them.

This can happen, for example, when filling in analytics values ​​while entering data into the accounting database, especially in cases where it is impossible to determine the analytics based on primary documents.

Or it may turn out that the original of the primary document did not arrive on time, and the “internal” primary document contained errors.

Neutrality of management reporting

Neutrality implies that the information contained in management reporting should be unbiased and should not influence decision-making in order to achieve the planned result. This can happen quite often in cases where managers rely too much on their intuition.

That is, they already have a ready-made solution in their heads, and with the help of a management report they only want to confirm its correctness. In such cases, the management report may be “tailored” to a ready-made result. Naturally, we are not talking about any deliberate distortion of data here.

“Adjustment” may consist, for example, in excluding from the management report indicators that clearly show the disadvantages of a prepared or already implemented solution. Another way to “adjust” may be to use a different accounting policy when calculating certain indicators.

After all, the same indicators can have different meanings when used various principles recognition and evaluation of business transactions. True, this method of “adjustment” can be successfully applied, mainly, when developing planned management reporting (budgets), because actual reports can only be obtained on the basis of information already entered, which means that it is quite difficult to change management accounting policies.

True, management accounting policies can initially be chosen in such a way that when used, the indicators that interest the company’s owners would look more attractive.

The predominance of essence over the legal form of management reports

The predominance of essence over legal form is also a completely logical condition for ensuring the reliability of management reporting.

Events should be presented according to their economic essence and economic reality, and not just their legal form, which do not always correspond to each other.

Obviously, this condition is directly related to management accounting policies, or more precisely, to possible differences between management accounting policies and accounting policies.

Prudence (conservativeness) of management reporting

Prudence or conservatism in management reporting means that in the face of uncertainty, care must be taken in making judgments so that assets are not overstated and liabilities are understated.

Where uncertainty is high, events should be disclosed only in notes to the reports. In other words, management reporting should not be “embellished” so that it is more pleasing to the management and/or owners of the company.

Comparability of management reporting

This characteristic of management reporting, such as comparability, is no less important than the previous three discussed above. It is clear that if the formats of management reporting change too often, it will be very difficult to control and analyze the dynamics of the indicators of such reports.

Of course, it is not always possible to develop the required form of management report the first time. To finally make sure that the form is complete, as a rule, it is necessary to draw up a management report several times in order to test it with numbers.

In this case, adjustments to the formats of management reporting are possible, but in the future it is advisable not to make changes to the forms of management reports unless necessary. Such a need may be due to a change in the company's strategy, which may require planning and monitoring of new indicators that were not previously included in management reporting.

Yes, in this case, the formats of management reports can be changed, but still, the company usually does not change its strategy very often, so the forms of management reports should not change often.

The number and composition of management reporting may change for another reason. If the company has a budget management system, and the planning model for certain reasons was detailed, which led to the emergence of new budgets and new indicators, then, naturally, it will be necessary to increase the number and composition of actual management reporting so that it is possible to obtain plan-factual reports for subsequent analysis.

Such actions, of course, may lead to changes in the existing formats of actual management reporting.

Classification of management reporting indicators according to the “time” parameter

All management reporting indicators for the “time” parameter can be divided into three groups:

interval (revolving);

instant (balance);

mixed.

Interval or turnover indicators management reporting provide information for a certain period of time (day, week, month, quarter, year, etc.). Such indicators may include, for example, sales volume, sales revenue, profit, financial flow, etc.

Instantaneous or balance indicators of management reporting provide information at a specific point in time. Such indicators may be, for example, cash balance, accounts receivable/payable, inventory, etc.

Mixed indicators are formed from interval and instantaneous ones. Examples of such indicators may be asset turnover (all or some elements: accounts receivable, inventory, etc.), return on assets, profitability equity etc.

It is necessary to pay attention to the fact that for the analysis of management reporting it is better not to use instantaneous indicators in their pure form, because they can vary greatly in each period. It is better to rely on interval or mixed (interval and instantaneous) indicators.

For example, if a company’s accounts receivable or inventory increases, then based on this information it is impossible to draw an unambiguous conclusion. If the turnover period of receivables or inventories increases, then this is clearly a negative trend, but the growth of receivables or inventory in itself says little.

Classification of management reporting according to the time characteristics of indicators

All management reporting on the time characteristics of indicators can be divided into three main groups:

factual management reporting;

planned management reporting;

plan-actual management reporting.

From the name of these groups of reports it is obvious what information they contain. But still it is necessary to make a few comments.

When preparing actual and planned management reporting, the same management accounting policies of the company must be used. Otherwise, it will complicate the analysis of plan-factual management reporting.

After all, some plan-actual deviations can arise only due to differences in the accounting policies that were used during planning and accounting.

When generating plan-fact management reporting for financial responsibility centers (FRCs), you need to remember that in this case it is necessary to use the principles of flexible budgeting.

Thus, when forming plan-actual budgets of the Central Federal District, it is first necessary to calculate a flexible plan, and then calculate plan-actual deviations. If this is not done, then the assessment of the results of the work of the Central Federal District in the reporting period will be incorrect.

Classifier of management reporting (by type of report)

Before you start developing management reporting formats, you must first create a report classifier, that is, a complete list of all necessary reports with brief description their content.

Of course, management reports can be classified in different ways. In fact, it is not so important which specific classification will be used in each specific company. The main thing is that it is carried out and clearly recorded in the relevant regulatory documents.

As a rule, the classification of management reporting is contained in the Regulations on Management Accounting. Naturally, the classification of management reporting should be convenient for use in practice.

An example of a possible classification of management reports is presented at Figure 1. It should be noted right away that the names of report groups are not generally accepted. Each company, in general, can use its own classification of reports.

Fig.1. Classification of management reporting

Although certain standards have already been established regarding financial reporting. That is, in every company, regardless of its areas of activity, organizational structure, business processes, etc. Three financial statements must be prepared: an income statement, a cash flow statement and a balance sheet (see. Rice. 1).

This is necessary in order to control the financial and economic condition of the company. Typically, the primary users of financial statements are the owners and CEO of the company. It should be noted that participation general director when developing management reporting formats, at least financial reports, is a necessary condition for the success of the management accounting project.

This does not mean at all that the general director himself must develop formats, but he must consider the draft forms of management reporting proposed by the working group of the project on setting up management accounting and, naturally, must delve into the essence of these reports.

In fact, one of the reasons for the general director's indifference in such projects may be his habit of managing not by the system, but by his eyes. The financial director of one company, at the very beginning of a consulting project on setting up management accounting, complained to our team of consultants about the general director.

He said that if you tell the CEO that he must understand three financial statements, then, most likely, nothing will come of this venture. The financial director explained that he had been making similar attempts for several years, so to speak, to accustom the general director to the use of management reporting in managing the company, but for him even one report is a lot.

It really took us quite a long time to convince the CEO that it was simply impossible to achieve manageability of the financial and economic state, especially in rapidly growing companies, in any other way. Therefore, he and I conducted individual lessons, first to study financial statements, and then operational ones.

By the way, financial statements are so called because they contain only cost indicators. Financial statements, of course, can contain relative indicators (for example, return on sales or return on assets), but these indicators are derived from cost indicators.

That is, in financial reports there are no indicators that are measured, for example, in pieces, kilograms, kilometers, etc. All financial statement items are measured in money. But in operational reports, in addition to cost indicators, there may also be natural indicators.

Objects of management accounting

Operational reports can actually consist of several groups (see. Rice. 1). In order to more easily understand the example of classification of management reports under consideration, you need to combine the classifier of management reporting with the classifier of accounting objects (see. Rice. 2).

Fig.2. Relationship between the classifier of management reports and management accounting objects

Financial reports are prepared for an object such as a company as a whole or for a group of companies, if we are talking about a holding company. By the way, drawing up consolidated financial statements for a holding company may be sufficient challenging task.

If the holding consists of companies that are not connected with each other at the operational level, then the task of consolidating financial statements is solved quite simply. If business transactions are carried out between the companies of the holding, then in this case not everything is so obvious, because it will be necessary to take into account mutual transactions so as not to distort the data on income and expenses, assets and liabilities at the holding level in the consolidated statements.

So, financial statements provide information about the financial and economic condition of the company as a whole. But in order to understand why exactly the values ​​of the financial statements indicators were obtained, it is necessary to dive into a lower (operational) level. Lower level management reports can be different types depending on the accounting objects.

Among the lower-level accounting objects, business processes, projects and divisions can be distinguished. Moreover, projects can be divided into current and investment. The fact is that the current activities from which the company earns profit can be organized in different ways.

Some companies (process companies) make money by organizing a chain of regular business processes from procurement to sales, while others (project companies) make money by building a system for performing time-limited actions (projects). Process companies may include, for example, organizations engaged in mass production, or trading companies engaged in regular wholesale or retail sales.

Typical representatives design companies construction organizations are considered, because they earn profit through the construction and sale of certain objects. The construction of such facilities in this case are ongoing projects. As a rule, all these objects are unique in their own way, so this type activity cannot be considered as more or less typical as mass flow production.

In fact, recently there has been a growing tendency to blur the line between the process and project organization of current activities. For example, some manufacturing companies may operate on a job-to-order basis, which may be considered a project activity. And among construction companies there are those that regularly build more or less standard objects, for example, towers for cellular operators.

A company may have several hundred such more or less standard objects throughout the year. Nevertheless, the current activities of any company are more related to either process or project activities. This is the basis for the development of a classifier of management accounting objects and a classifier of management reporting.

Thus, a process company simply does not have such an object as current projects. But in addition to current projects, regardless of the organization of current activities, any company may have development projects. The goal of these projects is fundamentally different from the goals of current projects.

Current projects allow the company to earn profit from its existing potential, and development projects are intended to significantly change the company's potential, which in the future, naturally, should have a positive impact on the final financial and economic condition of the company.

So, to control the current activities of process companies, functional (process) management reports are used, which contain information on financial and economic indicators that characterize the effectiveness of the implementation of business processes. The number and composition of functional reports are determined individually in each company.

To monitor the current activities of project companies, management reports on current projects are used, which contain information on financial and economic indicators that characterize the effectiveness of the implementation of business projects.

To monitor the effectiveness of investment activities, investment reports are used, which contain information on financial and economic indicators that characterize the effectiveness of the implementation of development projects.

And finally, to monitor the work of financial responsibility centers (FRC), reports on FRC are used, which contain information on financial and economic indicators that characterize the performance of those divisions that have been assigned the status of FRC.

Note: the topic of this article is discussed in more detail at the workshop "Organization and automation of management accounting", which is carried out by the author of this article -

Russian enterprises, due to legal requirements, may have obligations to provide to government agencies various types reporting - in particular, accounting. The preparation of relevant documents may require the consolidation of significant amounts of internal corporate resources. At the same time, many companies pay attention to the formation of specifically management reporting. It is not necessary to submit it to government agencies, but many corporations form it, and this process may require no less effort on the part of the company. Why does it make sense to apply them? What is the usefulness of the appropriate type of reporting?

The role of management reporting

What is management reporting and what is its role in an enterprise? This term refers to the totality internal documents, which contain figures reflecting various aspects of the company's business activities.

Management reporting, unlike, for example, accounting reporting, is prepared voluntarily. It does not need to be sent to the Federal Tax Service and other government bodies. Its role is to provide the company's management or its owners with reliable information about the state of affairs in the organization.

Management reporting can complement accounting or financial reporting in terms of generating data that is extremely important for optimizing the business model and increasing the profitability of the company. The type of activity under consideration may also include non-financial information, which is important for the correct interpretation of the effectiveness of management decisions made by the company's management. This type of reporting is valued not for the fact that it contains impressive numbers, but quite the opposite - for the opportunity to detect shortcomings in the enterprise’s business model that hinder successful growth.

Management reporting is a significant component of planning. The documents that form it include data that is of great importance for calculating the prospects for implementing certain decisions at the management level. In turn, upon completion of one or another stage of the company’s development, the type of reporting in question will allow us to analyze at some points the company’s management should have acted differently and what this was connected with.

Benefits of Management Reporting

What is the fundamental difference between financial, accounting and management reporting? First of all, methodology. The first two types of financial reporting involve the collection of mainly statistical information reflecting the turnover of capital in certain areas of business processes. In turn, management reporting involves not only the reflection of statistics, but also the interpretation of relevant figures. The company's management will be able not only to observe certain indicators, but also to understand what they mean.

Thus, the management reporting of an organization can show what causes more high profitability in the production of specific types of products or, conversely, what is the reason for insufficient revenue indicators and too high costs in a particular area of ​​business. Interpretation of the figures recorded in management reporting allows the company’s management to make intelligent decisions regarding necessary purchases, renewal of fixed assets, modernization of equipment, etc.

Internal management reporting, if prepared in a timely manner, can promptly identify those areas of the business process in which the performance of the company’s employees is not high enough.

What may be contained in the documents that make up the type of reporting under consideration? The point is that sources of information of the appropriate type can be presented within large quantity varieties. As a rule, certain documents are adapted for specific managers. Reporting is called management reporting mainly due to the fact that it is intended specifically for managers.

The management structure of modern organizations, as a rule, includes the positions of a general director, as well as his deputies. These could be: a deputy for production, for sales, or, for example, for financial issues. In the first case, internal management reporting may include data relating to:

• the cost of manufactured products or services (in relation to specific types of products);
• characteristics of work in progress, release of goods and services in relation to orders from specific customers;
• the volume of production of products that are sent to the warehouse;
• stocks of raw materials, materials or components that are used in the production of goods.

If reporting is submitted to the Deputy Director of Sales, then its structure may include:

• information about the sales structure in relation to specific types goods and services, with specific customers;
• data on the dynamics of product shipments;
• information about stocks in the warehouse;
• data on the cost of selling goods or delivering to consumers;
• planned indicators regarding the receipt of goods at the warehouse;
• information on accounts receivable for sold items.

If reporting is subject to submission to the Deputy Director for Finance, then it may contain:

• information on the execution of the enterprise budget;
• information on costs associated with business activities;
• figures reflecting the cost of goods or services produced;
• profit and loss data;

The reporting may also contain information about accounts receivable and the company’s own debts on loans and other obligations.

Frequency of management reporting

How often should management reporting be prepared? It is desirable that information reflecting the specified areas of activity of the enterprise should not be out of date by more than a week. In some cases, a particular enterprise may have identified key indicators that will need to be updated more often. Similarly, management can record secondary indicators that do not require much time to compile, and therefore such information can be provided much less frequently.

Shareholder reporting

The main feature here is that the company's shareholders may not take any direct part in the management of the company. It's often the case that the only area they're interested in is pure profit numbers. Detailing management decisions in reports provided to company shareholders is in some cases inappropriate. However, since the owners of the company are the ones who make key decisions regarding the appointment of top managers, the reports will be able to reflect information characterizing the effectiveness of the work of the general director and his deputies.

What might reporting look like?

What forms of management reporting are there? We noted above that, unlike financial and accounting documents, the corresponding type of paper is essentially unofficial in nature. Management reporting forms are not regulated in any way by law. Therefore, they can be developed by the organization based on the most appropriate structure - for example, depending on the recipient of the reports.

Perhaps the deputy director for finance will be more comfortable dealing with spreadsheet documents, and the owner of the company with graphs that clearly show how profits change depending on certain factors. In some cases, the reporting forms in question may be very similar to those prepared for the collection of financial or accounting indicators

Reporting procedure

How can documents of this type be generated? The reporting in question involves solving two groups of problems.

First, it is collecting the necessary numbers. Their source will likely be files generated by accounting and production units firms in the course of current activities. For example, if a certain volume of goods was shipped to a warehouse, the corresponding data is usually recorded in the company’s CRM system. Data on other business activities carried out at the enterprise are reflected similarly.

Secondly, this is the interpretation of indicators collected at various sites of production or presented in accounting figures. An analysis of management reporting is required. Its implementation, again, will depend on where exactly the relevant documents should be transferred. Moreover, in some cases less detail and in others greater detail of indicators is desirable. Similarly, a lengthy interpretation of the results may be encouraged or, conversely, extreme brevity may be required.

In some cases, interpretation of the numbers may not be necessary at all - for example, if it comes to handing over reports to an experienced financial director. He probably interprets results better than any other manager, and pure numbers will be enough for him.

Algorithm for generating reports

Let's consider how management reporting can be generated in practice. Among Russian experts, a popular algorithm involves solving the problem under consideration in the following stages.

The first step is to find out what type of reporting information the general director, his deputies and owners want to see, and with what frequency. Some may prefer to see the numbers weekly, while others may want to see key indicators once a month. It is also advisable for the future report preparer to find out at the very beginning of interaction with management what type of data is most likely to be a priority and what type of data will be secondary.

The next step is communication with an accountant to determine an algorithm within which the person involved in solving the problem under consideration will request the necessary numbers. The reporting preparer can also interact with other employees of the company in those areas where indicators that are significant for the necessary documents are formed. The enterprise must develop a management reporting system in which all competent employees will participate.

The next step is to create document forms in which, on the one hand, the numbers will be recorded and, on the other, interpreted. In this case, the person responsible for reporting may be faced with the need to create different forms documents adapted for a specific addressee - the general director, his deputies, owners.

The next steps will be related to the actual generation of reports. If the enterprise is small, then, in principle, the person involved in solving the problem in question can try to collect the necessary numbers himself. But it is likely that he will need the help of his work colleagues. In this case, the practical stages associated with collecting information may be preceded by some meetings at which the person will tell other employees about the basics of management reporting, the purpose for which the relevant documents are generated and why this is important for the company. The solution to this problem can be facilitated by the management of the company by issuing local legal acts that require individual employees to assist in the work of the person responsible for reporting.

Types of reporting

Having examined the key principles of management reporting, we can study certain types of corresponding models for displaying figures reflecting the activities of an enterprise.

The first type of reporting in question is the management balance sheet. What are its features?

The management balance sheet is, in principle, similar to the accounting balance sheet. Its fundamental difference lies in its functional purpose. The management balance sheet is designed not only to reflect numbers, but also to interpret them in terms of the effectiveness of the organization’s business model, the state of affairs in terms of the organization’s assets, the company’s obligations to partners and vice versa.

The numbers that include accounting, management, and financial reporting can, in principle, be entered into the same forms. However, how the relevant indicators are interpreted may determine the creation of documents in a completely original structure. It matters who the users of management reporting are - we said this above.

The balance sheet we are considering involves the inclusion of information that may be of interest to both the director and any of his deputies, as well as the owner of the company. In this sense, he may be in sufficiently universal document.

What other types of management reporting are there? Among these is the profit and loss statement. At the same time, it is traditionally considered to be an accounting source. A profit and loss statement is a document that enterprises are required to submit as part of official reporting to regulatory authorities. At the same time, it may well be used as a source in the formation of management reporting. This is primarily due to the very convenient structure of this document.

An organization's profit and loss statement records the financial results of the company's activities for a specific period of time. It reflects figures regarding income, costs, as well as financial results with an accrual total. The structure of the document of this type reflects: sources of revenue, expense items, profitability of the company. But, as we defined above, management accounting and reporting involve not so much solving problems associated with collecting numbers, but rather interpreting various indicators. Therefore, the document in question will probably need to be accompanied by additional sources that will record the necessary explanations regarding the figures reflecting the company’s income, expenses and profits.

Another significant document is the cash flow statement. This source reflects the financial income of the company in correlation with the sources, as well as payments to the company in relation to key areas of expenses - also in relation to a specific period. The cash flow statement can show how things are going in the company in terms of current production results and in the area of ​​liquidity. This document allows you to assess the creditworthiness of the company. The source in question may be useful to both the company’s management and its owners.

The main types of management reporting we have considered - the profit and loss statement, balance sheet, as well as a document recording data on cash flows - can, of course, be supplemented by other sources. They can be either similar to those we have studied or based on fundamentally different approaches to compilation.

Difficulties in reporting

So, we have studied what management reporting is, how it differs from accounting or financial reporting, and have become familiar with the procedure for its formation. It will also be useful to consider the possible difficulties accompanying its preparation.

According to experts in the field of business management, the most important problem characteristic of the reporting process in question is the lack of loyalty to the relevant document on the part of the company’s employees, and in some cases, also top managers and owners. Company employees - accountants, production site employees - do not always perceive management reporting as a document that should be given time, on which it makes sense to spend effort. Enterprises, as you know, are already obliged to provide official documents to government bodies, the preparation of which is not the easiest task.

A similar position, when management reporting is not perceived as something worthy of attention, can also be held by top managers and owners, as we noted above. Many of the managers, according to experts, treat the documents in question as a kind of method of misleading management, especially if it is necessary to divert attention from not the most outstanding production indicators.

How to solve a problem like this? Analysts recommend starting at the management level. It would be more justified to interest managers in the need to prepare management reporting, so that they, in turn, formulate the necessary local legal acts, according to which other employees will have to assist in the formation of relevant documents.

Another difficulty characterizing the solution to the problem in question is the need to constantly develop new approaches to interpreting the figures contained in the reporting. This may be due, first of all, to changes in production structure business. In the case of accounting and financial statements, as we know, no interpretation of the numbers is required. Therefore, it becomes possible to use standardized forms in which relevant indicators are recorded.

Management reporting of an organization, in turn, solves slightly different problems. It is needed, first of all, by the company itself, and not by government agencies, as is the case with accounting and financial indicators. If the interpretation of the figures contained in management reporting, given the structure of production in a certain period, played a positive role, then it is not guaranteed that it will be as useful, provided that the characteristics of certain business processes have changed. Most likely, the preparer of reporting documents will have to improve approaches to interpretation as the company's production activities change. This may require a lot of time - both his personal time and that of colleagues from whom he can turn for advice, opinions or some supporting indicators reflecting the company's performance in order to understand how to improve the approach to interpreting the numbers.

The noted problem can be solved, again, through periodic communications with colleagues in the format of meetings, the subject of which is the consideration of current production indicators, as well as the development of measures to improve them, including through the introduction of new reporting methods, such as management. In the context of positive approaches to optimizing production performance, it is more likely to be perceived positively by company employees.

Management reporting is a document that reflects the main processes that were carried out by the enterprise. Moreover, each organization has the right to independently determine the specific constituent elements of such a document. Mainly, reporting is oriented towards its users, and the content depends on their requirements and what interests them.

However, as with the preparation of any document in an enterprise, there are basic principles on which management reporting is based. First of all, it must meet the principle of simplicity. You should not overload the document with unnecessary and unnecessary information for a specific user; you should only include important indicators. In addition, its size should be clearly defined, for example, one A3. This will also help you choose the most interesting and informative facts. But the main thing is that management reporting should be subject to the principle of efficiency, that is, its content should allow the user to take effective measures to improve the organization’s activities. Simply put, the information provided must be timely.

Regular preparation of such a document will allow the manager to be confident in the effectiveness of the further functioning of the company, since the staff will act in accordance with the developed instructions. In addition, the specialist is obliged to complete all work on filling out the report within deadline. At the same time, all information should be understandable to the manager of the specific level for which it is intended. Correctly executed and well-written management reporting fully reflects the activities of the enterprise and does not provoke the emergence of additional questions.

Since the management personnel of the enterprise can themselves determine the content of this document, the form of its provision is also chosen at their own discretion. Conventionally, there are three ways to display information: graphical, textual and in table form. As a rule, the specialist relies on the user. For example, for an accountant, a tabular report will be the most convenient and understandable, and all amendments and explanations can be provided in the form of a text note. While it is easier for an investor or an employee of an analytical department to assess the state of affairs using graphs.

Separately, I would like to talk about the timing of reporting, since this factor determines its relevance, and, consequently, the timeliness of decisions made. So, a division into short- and medium-term reporting is usually used, and there is also periodic reporting. The latter involves displaying indicators that make it possible to develop specific measures for the long term, that is, to determine the strategic goals of the company.

The document that most fully reflects the dynamism of the functioning of an enterprise is considered to be short-term management reporting. An example of this appears in the form of daily and weekly collections of indicators, on the basis of which specific activities are developed for the next period. The main users at this level are considered middle managers.

Medium-term management reporting is prepared monthly. It contains not only indicators for the past period, but also forecast values ​​for future activities. It is provided mainly to the management team, since they are the ones who can decide on the need to introduce some adjustments to the document. Such a document can provide significant assistance to the company and definitely has a positive effect on the situation. After all, managers and executives see what to expect from the future period while maintaining their previous positions.