Management reports remains in limelight due to the transparency factor and because of current market situation. Due to recent failure in the corporate and requirement of transparency in information sharing, management reporting is an important need of hour due to following factors:
1. Precision to meet market authorities and regulators
2. Competence for organisation staff to meet the demands of the market and customers.
To meet shareholder claim for better speed and transparency, businesses need to execute more effective ways of communication. This is particularly crucial for financial information reporting where and figures have to be evidently presented and explanations universally shared to constrain out guesswork. This will result in reliable and transparent information. There are significant number of ways to create an efficient management reports which will be more effective in terms of transparency and meeting current market demands and requirement.
In this blog we will discuss few methods of efficient management reportings, but before discussing the methods we should always know the presumptions for a tried, tested and efficient reporting process
1. The recent collapse in corporate world has enlightened the need for precision and call for change in the way companies report to investors and financial markets. Market regulators and local authorities also require more timely information, more inclusive information.
2. In the recent time businesses are moving at an ever more faster pace a fact which is not lost upon the financial markets, which are stridently demanding business reporting to stand up to the mark. Corporates face regular challenges in broadcasting of financial information both internally and externally, investors, local authorities and stock exchanges. It is clear that swiftness is of fundamental nature and loss of precision is an increasing evident risk.
Electronic information serves as a fast, efficient and cheap method to reach audiences globally, when dealing with business reporting data, searching the Internet for information particularly for time receptive corporate disclosures which has become a natural prospect.
To do this top management of the company will have to find new improved tools to attain the related objectives of providing both trusted and efficient reporting to their audience.
There are two primary aspects essential to these calls for more revelation first, the critical data needed by investors, analysts and regulators is substantially the same as that used by managers to make both strategic and operating decisions; and second, the technology used to generate in depth information channels within companies is the same one used to generate corporate communications to the public via the Internet. Financial market participants are already clamouring for companies to provide a broader spectrum of information.
The structured reporting system do add value to the overall system in different manner
1. By Meeting the needs of the user it ensures that by providing support for the requirements of business users of the project solution.
2. To generate effortless use of reporting that are simple to use, easy to learn and contain standard tool for performing in depth ad hoc analysis and it can segregate accountability and Insight reporting
3. Liability reporting is primary planned to help management better measure performance against target, whereas, insight reporting is focused on providing information to help management better understand the business and react tactically and strategically.
The extent of reporting varies from client to client depending on needs, which can include preparation of high level management reports on a spreadsheet which entirely focus on evaluating implementation of corporate strategy to large scale implementation of specialized reporting applications.
Following can be, three typical examples of management reporting projects:
1. Strategic Reporting
2. Fast close project
3. Management Information System (MIS)
Strategic Reporting provides an insight about the development of corporate strategy implementation on a regular basis. The project phases are analysis of current corporate strategy, preparation of documentation containing strategic goals and drivers, identification and definition of key performance indicators, measuring strategic goals and drivers, design of reporting process ensuring regular information preparation and preparation of pilot reports for management.
Fast close project reporting is to shorten the closing and reporting cycle. Typical project phases are analysis of current closing and reporting process, identification of blockages and automation opportunities, support during regular monthly closure process and implementation of relevant tools like estimates and adjustments.
Management Information System augments efficiency of management report preparation and sharing. Projects in MIS implementation consist of identification of management information needs, definition of MIS data model, selection of MIS platform, preparation of Business blueprint describing in detail calculation of key performance indicators from source data, implementation of MIS database and extract, transform and load routines and rolling out of management reports or building a comprehensive management portal.
1. Augmented effectiveness of the reporting preparation and distribution process.
2. Acceptable, definite and informative key performance indicators and reports.
3. Condense delivery time for management reporting and reduction in cost.
4. Enhanced decision support system with faster and more relevant management information.
5. Improved logical capabilities and performance management support.
(Written by Ashwani Chandra, Class of 2008, IBS Hyderabad) Ashwani also shares his expertise on Finacology.com)