An Enlargement of Management Reporting

Management reporting transforms data to decision. A good suite provides leaders with an insight into performance, risks, and priorities--not overwhelming them with numbers. Five essentials that we elaborate on below include A comparison of Budget and Actual variance Reports, Business Unit Report or Departmental Reports, Project-Based Cost Analysis, KPI Tracking & Decision Dashboards and Board Reporting Packs. Employ them to enhance profitability, coordinate groups and go faster.

Budget vs. Actual Variance Reports

Budget vs. Actual (BvA) report measures what was planned as compared to the actual and indicates where you stand above or below it and why. Look beyond totals by dividing revenue (product, region, channel), direct expenses, and operating expenses into segments and tagging variances according to driver: price, volume, mix, timing or efficiency.

Business Unit or Departmental Reports
Financials are connected to levers that managers can manage through reports presented by the departments. Every function has to monitor core KPIs as well as budget vs. actuals.

What do we include:

• Sales: pipeline coverage, win rate, average-size of the deal, quota fulfilment.
• Marketing: cost per lead, qualified, lead-to-opportunity rate, CAC payback.
• Operations: delivery on time, output, wastes, capacity used.
• Customer success: logo churn, NRR/GRR, time to resolution.
• HR/ Finance: DSO/DPO/DIO and cash conversion cycle, headcount/ productiveness.

A monthly cadence should be used to understand trend and one-page summary is what improved, what slipped and what are some of the top actions. Add a weekly snapshot to fast moving teams such as sales.

Accountability is enhanced and leaders are able to invest in areas where returns are the highest because of the clarity that exists within the department.

Project Based Cost Analysis
In services, construction, R&D or implementations the profitability is decided at the project level. Track budget vs actuals by cost type (labor, materials, contractors), each hour by role, burn rate, and scheduled to complete. Include earned value measures to ensure detecting schedule and cost problems at an early stage.

Aids to controls:

• Normal rate cards and asumption of job cost labour.
• Disciplined timesheets and auto feeds of data.
• Margin warns when estimated gross margin decreases to a pre-determined level.
• A scope and price protecting change-order process.

Project reporting maintains margin, helps in laying price, and determines on what projects to engage or take a break.

KPI Tracking & Decision Dashboards
There are 2 questions dashboards should answer: Are we on track? What requires doing? Restrict each view to the 8-12 most important metrics, show targets vs. actuals as well as trends over time and use an appropriate and easy to visually interpret graphical cues (green, red, amber traffic lights, arrows, variance bars). enable drill through to detailed reports.

Common sets:

• Growth: bookings, pipeline coverage, win rate, churn.
• Profitability: gross margin, contribution margin, unit economics.
• Cash: cash runway, DSO, DPO, DIO, DIO, working capital.
• Customer: NPS/CSAT, growth census, Time to Value.
• People: headcount,attrition, utilization.

Dashboards accelerate the alignment process, maintain the focus on results and transform meetings into working sessions.

Board Reporting packs
Strategy, application and outcomes are the story of board packs. Make them brief, homogeneous and decision-based.

Include:

• Executive summary: best hits, misses, risks, and the required decisions.
• Financials: profit and loss, balance and cash flow with major variances and trends.
• KPIs that measure against strategy (growth, efficiency, cash, customer).
• Clear triggers and actions to make future and scenarios.
• Strategic activities: progress and roadmap, milestones, and blockers.
• Individuals: key hiring, talent gap, culture and retention.
• Risks and mitigations: market, operational, regulatory, cyber.

Discipline planning brings about improved supervision, quick response and high rate of trust.

Tying Them Up

These elements constitute a reporting system: BvA holds you accountable to plan, departments work on the levers within their span of control, project analysis safeguard the project margins, dashboards promote weekly execution and board packs concur strategy and capital. Combinations of these two result in a cycle of review, action and quantifiable improvement.

Are you willing to change how you make decisions and make better outcomes? Begun these management reporting practices today-or contact our team of experts who can help you create a powerful set of actionable reports that helps your business to succeed. Contact us today and have the only power of informed management available to you.