Management reporting

Management reports keep internal stakeholders "in the know" of company activities. They're among the internal reports managers and senior executives use to run the organization, make business decisions, and monitor progress.

Management reports help leadership monitor their department. Employees submit reports to their managers, who then use those reports to inform executive management of progress and make strategic decisions. 

Management reports can range in content and breadth. Often, management reports contain financial and operational information on a small segment of the business and can serve as a form of business intelligence. Because they contain proprietary information, management reports are confidential and for internal use only. They do not follow GAAP, IFRS, or any fixed format or template. Unlike regulatory reports, there are no external data specifications, deadlines or imposed timeframes other than those management has decided on internally.

Management reports come from every department: marketing, customer service, IT, finance, sales, and operations.

• Measure and monitor specific performance metrics and KPIs
• Understand the status and health of an objective and determine next steps
• Establish benchmarks and goals
• Ensure better communication between stakeholders, colleagues, and executives
• Guide your next steps
• Force you to have an action plan
• Monitor performance frequently

Management reports give managers and their teams a data-driven indication of progress and success. They indicate where things need to change and provide insight into how activities contribute to strategic goals. They can be an early warning system for missed KPIs, or they can show that a project is going well and could use further investment. Management reports also show how projects or initiatives contribute to budgets, revenue, the strategic plan, and the organization's greater good.

The category of management reporting extends to virtually every department. The following are all examples of management reports: 

• Financial reports
• Project reports
• HR and personnel reports 
• Compliance reports 
• Cash reports 
• Variance analysis 
• Status reports 
• Forecast reports 
• Board reports and packages 
• Budget books 
• LoB reports 
• Variance reports 
• KPI reports 
• Systems reports 
• Internal audit reports

Effective management reporting is all about clear, frequent communication. Does the management report tell a story? Does it prompt action? Does it give decision-makers critical information promptly? Does it identify problems or opportunities? Does the report contain information relevant to the manager and their decision-making?

Universally, effective management reports communicate the following:

Clear communication of objectives

What is the purpose of the management report, and how does it contribute to department or company goals?

Key performance indicators (KPIs)

How will you measure success? What performance are you monitoring, and what is the threshold you're trying to reach? Key performance indicators reveal if the tactics you're using work. KPIs might be related to effectiveness, quality, sales, budget, timeliness, financials, or people (prospects, customers, etc.).

Think critically about the report's structure and content

Start backward. What exactly does management need to do with the information in this report? What do they want to know in this report? What's the progress been from one reporting period to the next? Creating the report with the end in mind allows you to get to the point and avoid extraneous, distracting information.

Always include a "so what?" section that analyses and explains performance. Without context, numbers are just numbers. By adding a performance analysis section, you’ll help management understand what the results mean and justify your recommendations for next steps.

Consider the following essential components:

• Objectives 
• KPI performance trends 
• Current KPI performance 
• Analysis 
• Recommendations and next steps

Make it visual

Facilitate at-a-glance analysis by making your management report tell a story through visualizations. Charts, graphs, heat maps, and big, bold percentages show quickly communicate results to managers. If metrics are dynamic, management can explore them if they’re compelled to investigate

Key in the frequency

Depending on the project or reporting function, weekly, monthly, or quarterly reporting might be necessary. You’ll want to choose a reporting interval that gives you enough time to take remedial efforts to address unwanted results and identify performance trends without inundating management. Dynamic data automation has huge advantages during report creation. When reporting is automated, performance data automatically updates, removing the need for creators to manually cut and paste the latest figures.

Real-time KPI dashboards

 Reporting mechanisms should be put in place before the final output so that reporters can take steps to improve activities to meet KPIs. Reporting dashboards help you keep a real-time eye on KPIs to monitor progress and, if necessary, take steps to improve performance before the report gets into your manager's hands.

There is no one way to prepare a management report. Every management report has a different purpose. No matter what type of management report you're creating, your management report should contain the following sections:

• Set specific goals and understand the results you desire before doing anything else.
• Determine the most relevant KPIs for your management and lay out the performance metrics you should monitor. Remember: Managerial views will be broader and more long-term. Your perspective might be narrower and short-term.
• Visualize the data's story by adding visuals to the report using graphs, pie charts, dashboards, whitespace, heat maps, etc.
• Create a colorful but direct narrative to help executives understand your findings. Use a combination of hard data and storytelling to present your results. Your storytelling should be clear and concise, and seek to answer all potential questions from your superior before they ask.
• Compare real-time information and historical information over given periods. In other words: Showcase past KPI performance, progress, and current progress.
• Make sure your data is correct and up to date. (A single, automated source of data ensures accuracy.).
• Outline next steps and action items based on results.

Management reporting systems are control systems that standardize the communication of business information. They seek to expedite the production of reports while improving the accuracy of performance reported.

Management reporting systems:

• Automate low-value tasks, like data collection, to help users create reports faster and accurately so they can focus on high-value tasks, like analysis.
• Reduce data redundancy, data duplication, and data quality issues by centralizing and automating the distribution of performance data.
• Improve management responsiveness by promptly generating reports, providing reporters with dynamic visualizations and customizable templates, and automating the delivery of reports to relevant stakeholders.

Typically, management reports are developed at the job function or department level. For example, you might have a management report on revenue generated from a specific product, sales leads generated from a particular campaign, or social media engagement and growth over a period of time. On the other hand, financial reports, like the P&L, balance sheet, and cash flow, are high-level and paint a picture of the entire company’s financial performance.