Management Reporting, and What Should Be In It

A useful one is four pages, arrives by the tenth, and produces decisions.

The test for including anything

Would a different number here change what you do?

If not, remove it. That test alone usually halves an existing report.

Page 1. The four numbers

Cash position, lowest point in the next 13 weeks.
Gross margin percentage, this month against last and against the same month last year. Receivables ageing total, with anything over 90 days named.
Committed costs for the next quarter.

If somebody reads only this page, they know whether the business is in trouble.

Page 2. Profit and loss, with comparison

Actual against last month and the same month last year.

Not against a budget nobody believes. Comparison to a budget written ten months ago tells you about the budget, not the business.

Only comment on lines that moved. Three sentences.

Page 3. What is behind the numbers

Revenue by customer or service line, whichever your business is actually organised around.

This is where the useful surprises live. Which customer grew, which quietly stopped ordering, which line is carrying the others.

Page 4. The list

What needs a decision this month. Named, with an owner.

Overdue receivables needing a call. Costs to be renegotiated. A price that has not moved in three years.

Most management reports have no page 4, which is why they produce no action.

What to remove from the report you have

Ratios calculated because the template contains them. Nobody has ever acted on a current ratio in a business of this size.

Twelve months of history on every line. Nobody reads across twelve columns.

Commentary restating the numbers in sentences. If the number fell 12%, saying so in prose adds nothing. Say why.

Timing beats precision

A report by the tenth that is broadly right beats a perfect one on the twenty-fifth.

By the twenty-fifth the month is nearly over and you have lost the chance to act on it. Accuracy that arrives too late to change anything is not accuracy that helps.

What makes it possible

Books reconciled monthly.

Every reporting problem in a small business is really a bookkeeping problem. You cannot report on the tenth from a ledger reconciled in March.

Where we fit

We produce this monthly as part of bookkeeping. If your current report is twenty pages and you do not read it, we will build the four-page version instead.