The leaders of organizations try to maintain a stable high economic condition of their enterprises. As a rule, for this it is necessary to make some decisions, but in order to do something, you need to have information. Management reporting is internal reporting that shows the financial condition of a company. Typically, this information is required for internal users.
Management reporting contains information about all divisions, departments that are in the organization. Yes, undoubtedly, the manager can assess the economic situation on the basis of accounting, but he does not reveal all the subtleties of the system. For example, management accounting will answer the following questions: what products are in demand; what is profitable: purchase materials from suppliers or make them yourself; whether it is worth repairing the equipment or is it better to replace it.
Also, management reporting provides information on production efficiency; identifies problems related to labor productivity; collects and organizes data. Its compilation is not mandatory, but if the manager plans to increase the volume of sales by reducing any resources, then he simply needs such information.
Who should prepare management accounts? This is typically done by people in leadership positions such as COO, CFO, Sales and Purchasing. Various forms are used for accounting, for example, text or tabular. As a rule, the information contained in the documents should be accurate and clear. Data is taken from accounting programs, documents. For example, the material was transferred to production, the storekeeper must record this. After that, the shop manager reports how many units of products are made from this material, etc.
In order for the data transmission system to be established, you must inform the employees. Initially, appoint people who will be responsible for certain links. Establish a data transmission system, you can also negotiate the timing of the submission of management reporting. Naturally, it is impossible to cover all aspects of production, especially if the enterprise is quite large, so develop a plan where you identify the main areas that require assessment, observation and control.
