Monthly management reports give managers the data that they need to make better business decisions. However, consistently staying on top of management reporting every month can be a challenge, especially for small businesses. It's a task that can involve a lot of work and you and your finance team don't always have the time available to get it done on time. There are multiple reasons you might find that your monthly management reporting is difficult to manage, but there are also solutions that can help you to get back on track.
Lack of Qualified Staff
One of the reasons your business might struggle with monthly management reporting is a lack of qualified staff to prepare robust and insightful reports. Many SMEs rely on bookkeepers, rather than accountants, who don't have the skills, experience, or dedication to carry out your management reports. Or it could be a problem caused by high staff turnover, meaning that there is a lot of stopping and starting as new bookkeepers or accountants need to familiarise themselves with the system and pick up where the last one left off. Poor quality staff could mean you end up with reports lacking in accuracy, delivered late, or not very useful.
Late Preparation
Late preparation of monthly management reports can be a big challenge for many small businesses. The later your management reports are produced, the less useful they are. Timely action becomes impossible.
Data dump vs Insight
Management reports should not only include the financial statements, but also a narrative highlighting key issues. And yet its only too common to see just a P&L report in excel format as a ‘management report’. No wonder many SME directors don’t read them.
Linked Finance and Operations
Linking financial information to your business operational data can be a big challenge when preparing monthly management reports. It's important that the financial information presented is related to the business's daily operations and business goals. It helps to put the data in context and ensure it is understood by people who are running the business. For example, ‘operational profit’ means little for a branch manager, but number of active contracts, number of employees etc do. Its important that the relationship is understood in all levels.
Addressing Key Challenges
There might be multiple challenges to face when it comes to monthly management reporting, but these challenges can also be addressed. The most important thing is to make sure you have qualified, experienced, and knowledgeable bookkeepers and accountants taking care of your management reports. Involving qualified professionals can help you to gain the expertise you need at an affordable price to ensure your reports are always prepared in a timely manner with the insights you need.
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