Principles for constructing management reports based on data from existing accounting databases

Management reports, their purpose

Distinctive features of management reporting from conventional accounting

Financial analysis and planning based on management reports

It was always necessary to generate management reports; the term “managerial” was simply not applied to such internal reports.

Management reporting is a set of internal reports of an enterprise that are generated on a voluntary basis. The main purpose of their compilation is to obtain reliable information about the state of affairs of the enterprise on a specific date, for example, to provide management or owners of the enterprise.

The legislation of the Russian Federation does not provide for unified forms of management reporting due to the voluntariness of its formation, therefore each enterprise has the right to independently develop reporting forms. As a rule, the usual forms of financial statements are taken as a basis.

The main difference between accounting and management reporting is the recipient, the end user. Mandatory accounting reporting is necessary for managers - to analyze the activities of the enterprise for the past reporting period, for auditors and the tax service - to verify the correctness of the reflection of the facts of activity.

Voluntary management reporting is necessary exclusively for the head of the enterprise, his deputies or other authorized persons (management personnel and managers, for example), as well as for the owners of the enterprise to analyze the operation of the enterprise and plan further activities in the short or long term.

In addition, accounting reports are compiled for the enterprise as a whole, and management reporting, if necessary, is presented in the context of structural divisions, separate divisions, subsidiaries, etc. Such detail allows us to identify problem areas.

Note!

Experts in the preparation of management reporting note that you should not overload reports with information, otherwise the document will be difficult to perceive.

The frequency and composition of management reporting depends solely on the requirements of end users (for example, management). Reports can be generated daily, weekly, monthly, quarterly and annually.

As a rule, management reports include planned and actual indicators. This allows you to carry out plan-fact analysis and calculate relative coefficients characterizing the efficiency of financial and economic activities.

This is not a complete list of reports that can be included in management reporting. Let us repeat that the purpose and content of reports directly depend on the requirements of the recipients. Therefore, the following secondary management reports can be generated:

• on the actual cost of production in comparison with planned indicators;
• on the execution of the production plan;
• execution of the marketing plan;
• for work in progress;
• on stocks of raw materials and finished products;
• about accounts receivable;
• about accounts payable, etc.

Income statement

This is perhaps the most important management report. It reflects information about the actual profit/loss of the enterprise.

The form of the financial results report (form No. 2) of the financial statements was approved by Order of the Ministry of Finance of Russia dated July 2, 2010 No. 66n (as amended on April 6, 2015) “On the forms of financial statements of organizations” and has a fairly detailed form.

In a management report, it is permissible to both group some lines of the report and, conversely, provide a more detailed breakdown (primarily this concerns the company’s expenses).

The final recipients of the document can also request detailed information on revenue (for example, broken down by type of product).

A fragment of the management report on financial results is in table. 1.

Table 1

Fragment of the management report on financial results, thousand rubles.

The main thing we see from this report is the positive financial result of the enterprise: revenue exceeds the costs the enterprise incurred to produce and sell products.

However, every company constantly strives to increase profits. To do this, as a rule:

• increase the selling price per unit of production (which, as a consequence, increases the amount of revenue);
• reduce the cost of sales (with a constant amount of revenue, this increases profit, including profit per unit of production).

When planning financial results based on management reporting, actual and planned sales volumes are taken into account. Such planning is quite conditional, since the cost of sales includes both fixed and variable costs, and the former practically do not change with an increase or decrease in sales volume.

We will carry out preliminary calculations to draw up a planned report on financial results.

We know that revenue in the amount of 68,074 thousand rubles. received from sales of 257 units. products at a price of RUB 264,880.00. per unit (the analyzed enterprise produces one type of product).

In the next reporting period, it is planned to sell 294 units.

Thus, the planned revenue will be 77,875 thousand rubles. (RUB 264,880.00 × 294 pcs.) at a cost of RUB 64,767 thousand. (RUB 220,295.70 × 294 pcs.).

Forecast report on financial results - in table. 2.

table 2

Forecast report on financial results, thousand rubles.

With such planning, profitability indicators (products, enterprise, sales, etc.) remain unchanged, because forecasting takes into account only fluctuations in sales volume.

Let's calculate the main profitability indicators that characterize the profitability of the enterprise and the economic feasibility of its activities.

Profitability of core activities (R1) is the ratio of profit before tax to revenue from product sales. This ratio shows what part profit is in revenue.

Conventionally, the normative value is considered to be 10–15%.

In our case, R1 = 10,078 / 68,074 × 100% = 11,728 / 77,875 × 100% = 15%.

The higher the profit margin in relation to revenue, the more profitable the enterprise is considered.

Product profitability (R2) is the ratio of net profit to total cost. This indicator is very important for analyzing the efficiency of activities: it shows how profitable the products produced are, how much profit the enterprise received from the total costs of its production.

In our case, R2 = 8062 / 56,616 × 100% = 9382 / 64,767 × 100% = 15%.

For your information

At the stage of analyzing management reporting and planning activities in the short or long term, it is possible to identify problem areas, such as high enterprise costs for production, low revenue, etc.

Based on the results of the analysis, they formulate a policy for the further development of the enterprise, make decisions, for example, on abandoning the production of any type of product, on expanding the sales market, optimizing costs, increasing/lowering the retail price, etc.

Organization of accounting and management accounting in LLC: similarities and differences

Any company must keep accounting records, regardless of what industry it operates in, what its scale is, etc. After all, accounting is designed to record all the facts of the economic life of an enterprise and reflect them on the appropriate accounts in order to provide the most complete financial picture of what is happening.

For information on LLC accounting records, see the article “Accounting statements for LLCs - features and nuances.”

NOTE! Accounting data in some cases serves as the basis for calculating a company's tax liabilities. For example, the property tax base is calculated based on accounting data.

The main purpose of accounting and, accordingly, final financial statements is to provide interested external users with summary data on the results of the company’s activities for the reporting period. Such interested parties, as a rule, are banks, suppliers or other creditors, investors, i.e. all those persons to whom the company in one way or another has certain obligations.

Management accounting, in turn, is not intended for external users, but directly for the managers of the company itself. It is designed not only to help company managers assess the current state of affairs, but also to provide reliable information for making effective management decisions and to help quickly respond to external influencing factors.

NOTE! At the same time, the users to whom management reporting is targeted can be very different: from heads of structural divisions to the president of the company or managing partner.

The focus of management accounting on efficient and quick adoption of effective business decisions by managers determines the difference in formats for presenting indicators of management accounting compared to accounting. Management reports may differ in a greater degree of detail, other accounting methods used (for example, those established by the Tax Code of the Russian Federation, and not RAS or IFRS), the use of special accounts/sub-accounts that the company does not use in accounting, a greater frequency of preparation, etc.

Management accounting is also needed for planning and budgeting. Read more about this in the article “Organization of financial planning and budgeting” .

Managerial balance

The form of the management balance sheet is not approved at the legislative level, so we recommend using the form of the usual balance sheet.

For your information

Depending on the wishes of the end user, you can remove unnecessary balance sheet lines, group individual items or, conversely, describe them in detail (for example, borrowed funds, if their share in the balance sheet currency is significant).

An example of a managerial balance sheet is in table. 3.

Table 3

Management balance, thousand rubles.

We made the usual form of the balance sheet simpler - we removed items with zero values, with the exception of section IV, in order to focus on the fact that the company has no long-term liabilities.

Based on the management balance sheet, the main indicators of the financial condition of the enterprise are calculated. At this stage, a comprehensive analysis of reporting is not needed - it is enough to focus on the problem areas of the enterprise:

The equity ratio (EFR) is calculated as the ratio of the difference between equity capital and non-current assets to current assets:

CMRR = (Total for Section III – Total for Section I) / Total for Section II,

in our example, CMRR = (11,042 – 4,806) / 40,875 = 0.15.

The value of the indicator indicates an unsatisfactory balance sheet structure and a high probability of insolvency of the enterprise as a whole.

An indicator value greater than 0.5 indicates the good financial condition of the enterprise and its ability to pursue an independent financial policy.

The debt ratio (Кз) is calculated as the ratio of the enterprise's total debts to its own funds:

Кз = (Total for Section IV + Total for Section V) / Total for Section III;

at the analyzed enterprise Kz = 34,639 / 11,042 = 3.14.

The standard value of the indicator is below 1. Otherwise, the amount of borrowed funds exceeds own funds.

Based on the results obtained, it is possible to predict the balance sheet model for the next reporting period, for example, using the percentage of sales method.

To compile it, you need the following data:

• about actual sales for the reporting period (for our example - 257 units), for which the management balance sheet was compiled;
• about the planned sales volume in the next period (for our example - 294 units).

The coefficient of change in sales volume (Kizm) is calculated as follows:

Kism = Q2 / Q1,

where Q1 is the volume of product sales for the previous period, pcs.;

Q2 - volume of product sales for the planned period, pcs.,

in our case Kiz = 294 / 257 = 1.144.

The amount of net profit according to the forecast (see Table 2) is 9382 thousand rubles. provided that the company will not distribute profits as dividends due to the high level of short-term liabilities that need to be repaid.

Net profit can be used, for example, to increase retained earnings (RUB 5,486 thousand) and to pay off liabilities (RUB 3,896 thousand).

Based on this methodology, we will draw up a forecast balance (Table 4).

Table 4

Forecast balance, thousand rubles.

Based on the proposed changes, we will calculate the coefficients:

KOSS = (16,528 – 5,498) / 46,761 = 0.24;

Kz = 35,731 / 16,528 = 2.16.

So, thanks to the measures formed on the basis of management reporting, it was possible to increase the enterprise’s independence from borrowed sources of financing and improve the ratio of equity and borrowed funds.

To consolidate the effect, it is worth analyzing the profitability of the enterprise and finding an opportunity to increase the level of profit to strengthen financial independence.

Income and Expense Report

The income and expense report allows you to analyze the volume of cash flows, revenue from sales of products and costs of their production and sale, and calculate coefficients characterizing the business activity and financial stability of the enterprise.

First, the enterprise prepares a planning document on future income and expenses, and based on it, an actual management report. On its basis, planned and actual indicators are analyzed.

An example of an income and expense report is presented in table. 5.

Table 5

Management report on income and expenses

When presenting management reports to management, you must be prepared to answer questions. For example, if there is no income - “why?” In this case, it is necessary to find out why the funds were not received - there were no shipments, the customer delayed payment, etc.

If the expense portion of the report has changed significantly, you may have to prepare a more detailed report for certain items.

An analysis of the income and expense report will allow you to understand in advance that in a certain period there will not be enough money in the account, for example, for advances to suppliers. Then management will have the opportunity to quickly respond to the situation, for example, agree to postpone the terms of the advance.

Naturally, such reports are constantly adjusted depending on changes in planned payments.

How does the unified accounting methodology work?

Accounting methodology is a set of rules by which accounting is kept. A unified methodology for several types of accounting is a set of rules that sets out how each type of transaction should be reflected in each type of accounting.

To create the correct unified methodology, you need to analyze the current state of each type of accounting, take into account the specifics of the industry and the activities of a particular business, and evaluate the applicability of best practices. Next, you need to, if possible, solve the problems in each accounting, bring them together as much as possible and make sure that the final reporting contains the information necessary for managing the enterprise.

For example, many companies find it useful to have a high level of detail in their reporting, but this is not always true. For example, for large companies or companies with many item types, it is often useful to summarize data by group, especially in reports over a short period of time. The manager should delve into the details once a month or quarter (depending on the specifics of the industry), and detailed daily and weekly documents only take up time or are ignored.

Such a system of standards, if developed correctly, allows accounting to be carried out in the best way for the organization. That is, in such a way that useful reporting is promptly generated, that this reporting is reliable, and that a minimum of employee time is spent on record keeping.

Based on such a set of rules, you can effectively automate all types of accounting: accounting, tax and management. This can be done either with the help of one computer program or with the help of several specialized ones that are interconnected. The more complex the accounting structure and the more flexible reporting a company requires, the greater the number of software products and work required.

As a result , it will be enough to enter each operation into the system once , and it will correctly reflect it in each accounting and can itself compare the final results in the reporting documents.

Cash flow statement

The cash flow statement (CFS) contains information about cash flows (according to the current account and/or cash register), reflecting both planned and actual receipts and expenditures of funds.

The structure is similar to the cash flow budget (CFB), the distinctive feature is the presence of actual indicators characterizing the execution of the budget.

ODDS allows you to assess the financial capabilities of an enterprise, monitor the availability of funds in the account and in the cash register of the enterprise, balance the receipts and expenditures of funds, and therefore control the liquidity and solvency of the enterprise.

ODDS, like BDDS, includes cash flows from current investment and financial transactions.

Current cash flows are revenues from sales of products, rental payments, expenses for paying for the services of suppliers and contractors, wages for employees of the enterprise, tax payments, etc.

Investment cash flows are transactions associated with the acquisition, creation or disposal of non-current assets, for example, costs of development and technological work, loans, payments in connection with the acquisition of shares, etc.

Cash flows from financial transactions include proceeds from operations related to attracting financing (cash deposits, payments in connection with the repurchase of shares, payment of dividends, repayment of bills, etc.).

In order to effectively plan the expenditure and receipt of funds, it is necessary to conduct a plan-factual analysis, especially in a crisis situation, when payment discipline worsens and the enterprise may not have enough money to make payments.

Management ODDS increases the efficiency of planning and budgeting in general.

An example of a cash flow statement is presented in table. 6.

Table 6

Cash flow statement for July 2021, thousand rubles.

The first thing a manager or other end user of the ODDS will pay attention to is the negative value of the cash flow indicator.

For your information

Cash flow is a calculated indicator for each type of cash flow (current, financial and investment activities), representing the difference between cash receipts and expenditures.

A negative cash flow value indicates that cash receipts are lower than expenditures. And if the business had no cash balance from the previous month, it would not be able to make payments.

In the example, ODDS is presented broken down by manufactured products and separate divisions (Moscow and St. Petersburg). Management may require a more detailed breakdown, for example, if plans differ significantly from actuals.

Based on the cash flow, for example, for a month, cash flows for the next month are predicted, taking into account expected receipts.

Analysis of actual cash expenditures for a month allows you to classify expenses from the point of view of consistency and commitment, to form a certain “constant”, i.e., the amount of cash expenditure that is necessary monthly.

Based on the payment registers and payment calendars in terms of receipts of advances and final payments from customers, the revenue part of the ODDS is formed.

Such cash flow planning ensures efficient cash flow management.

Note!

Plan-actual analysis of the cash balance allows you to set a limit on the cash balance at the end of the month in order to ensure the solvency of the enterprise at the beginning of the next reporting month and in the event of insolvency of counterparties.

Management accounting for directors

In order for the company’s management to quickly analyze deviations of actual indicators from planned ones, as well as plan the effective operation of the enterprise and its development, it is necessary to generate management reports

These reports are not submitted to regulatory authorities and there are no standardized forms for them, but they are necessary for internal analysis of activities and planning in the short or long term. Therefore, each enterprise independently develops reporting forms. Usually the usual forms of financial statements are taken as a basis.

Therefore, management reporting

is a set of internal reports of an enterprise that are generated on a voluntary basis. Their main goal is to obtain reliable information about the state of affairs of the enterprise.

It is recommended to determine the frequency of preparation and composition of management reporting based on management requirements. These reports can be generated daily, weekly, monthly, quarterly and annually.

Basic reporting forms

Despite the fact that each owner or top manager has his own view of the financial statements he needs to manage his business, there are standards that are recognized throughout the world.

One of these standards is the three main forms of financial reporting

:
Balance, P&L
and
Cash Flow
(Balance Sheet, Profit and Loss Statement and Cash Flow Statement). These reporting forms provide complete information about the finances of the enterprise.

If management requires more complete and voluminous information about the situation in the company, then the following management reports

, such as:

• on the actual cost of production in comparison with planned indicators;
• on the execution of the production plan;
• execution of the marketing plan;
• for work in progress;
• on stocks of raw materials and finished products;
• about accounts receivable;
• about accounts payable, etc.

Income statement

It is considered almost the most important report, since it reflects information about the real profit/loss of the enterprise.

The form of the financial results statement (Form No. 2) of the financial statements is taken as the basis. But in a management report, you can both group some lines of the report and give a more detailed breakdown of the income and various types of expenses of the enterprise.

When planning future results, companies take into account actual and planned sales volumes based on management reporting. At the stage of analyzing management reporting and planning activities, problem areas are identified, such as the enterprise’s high production costs, low revenue, etc.

Further, the results of the analysis make it possible to formulate a policy for the further development of the enterprise. Management may, for example, refuse to produce a certain type of product or increase/lower the retail price.

Managerial balance

Here the standard balance sheet form is taken as a basis. You can remove unnecessary lines, group individual articles, or, conversely, write them down in detail.

The form of any balance sheet, including the form of the managerial balance sheet, is a table that consists of two sections, the amounts of which balance each other.

First section

is a list of assets.

Second section

is the sum of liabilities and equity in a business (list of liabilities).

Thus, expressed as an equation, the balance shows:

Assets = Liabilities + Equity

To estimate your net worth, you simply need to express the equation as:

Equity = Assets – Liabilities

Income and Expense Report

It allows you to analyze the volume of cash flows, revenue from sales of products and the costs of their production and sale, as well as calculate coefficients characterizing the business activity and financial stability of the enterprise.

First, a planning document is created about future income and expenses, and then, based on it, an actual management report is created. Next, an analysis of planned and actual indicators is carried out.

Note! When presenting management reports to management, you must be prepared to explain the situation. For example, if there is no income, you must answer why exactly. You need to know why the funds have not been received - there have been no shipments, the customer is delaying payment, etc.

If the expense part of the report has changed significantly, you will have to prepare a more detailed report broken down by expense items.

Analysis of the income and expense report will allow you to understand in time that in a certain period there will not be enough money in the account, for example, for advances to suppliers. Then management will have the opportunity to quickly respond to the situation and, possibly, agree to postpone the terms of the advance.

Such reports must be continually adjusted based on changes in planned payments.

Cash flow statement

The cash flow statement (CFS) contains information about cash flows. It reflects the planned and actual receipts and expenditures of funds.

Its structure is similar to the cash flow budget (CFB), but it has its own peculiarity - actual indicators characterizing budget execution.

ODDS allows you to assess the financial capabilities of an enterprise. Thanks to this report, you can monitor the liquidity and solvency of the enterprise.

When studying your ODDS, management will pay attention to Cash flow

- a calculated indicator for each type of cash flow (current, financial and investment activities), representing the difference between cash receipts and expenditures.

Current cash flows

— these are revenues from the sale of products, rental payments, expenses for paying for the services of suppliers and contractors, wages for employees of the enterprise, tax payments, etc.

Investment cash flows

— these are transactions on non-current assets, for example, costs of development and technological work, provision of loans, payments in connection with the acquisition of shares, etc.

To cash flows from financial transactions

includes proceeds from operations related to attracting financing (cash deposits, payments in connection with the repurchase of shares, payment of dividends, repayment of bills, etc.).

To effectively plan the expenditure and receipt of funds, it is necessary to conduct a plan-factual analysis. It allows you to set a limit on the cash balance at the end of the month to ensure the solvency of the enterprise at the beginning of the next reporting month and in the event of insolvency of counterparties.

Thus, managerial ODDS increases the efficiency of planning and budgeting in general.

For example, the BIT.FINANCE program suggests two ways to generate this report: direct and indirect.

The indirect method is provided exclusively for analyzing the flow of operating cash. To represent the movement of money from activities related to financial circulation and investment, an exclusively direct method is used.

10 common mistakes in management reports

When preparing reports for your manager, you may encounter some pitfalls that you should pay attention to.

1. One of the reporting forms is missing

You've created a cash flow statement because it's the easiest of all. But it can only show the imaginary well-being of the company. When it comes time to pay bills, there may be no money available.

In the absence of basic P&L and Balance reports, it is simply impossible to see the real picture of what is happening.

2. Distortion of reporting

Typically, a company prepares several types of reports. For accounting and tax accounting, owner, general director, bank, investors.

Quite often, the information that is the source for generating all these reports is distorted.

3. Incorrect classification of short-term and long-term debt

For example, from period to period the debt is listed as long-term, then it becomes short-term, and specialists, out of habit, forget to transfer it.

This error affects the calculation of financial ratios when analysts work.

4. Reflection of depreciation

Depreciation is the process of transferring the cost of fixed assets to the cost of produced and sold final products as they wear out, both material and moral.

Some companies do not reflect depreciation in management accounting, or write off the cost of the object at the time of acquisition.

5. Reflection of VAT

When preparing a statement of financial results, many companies take into account revenue and costs including VAT. This distorts the financial result.

For exporters, this reflection reduces income, and for others, depending on the profitability of the business, it can lead to both deterioration and improvement of financial results in one period, and vice versa - in another period.

6. Reflection of interest

The topic of reflecting interest is a controversial issue for most companies. Some classify them as financial activities, others as investment ones.

There are proponents of both approaches.

7. No segmentation of management accounting

One of the most common inaccuracies. At the same time, information about the profitability of each business segment is necessary for making the right management decisions.

The deeper the analytics in a company, the higher the quality of decision making. However, you need to be careful, because in addition to financial errors when working with management reporting, mechanical errors may occur.

8. Manual data entry

You can make purely mechanical errors when entering or formatting, in data collection, entering data into accounting and specialized programs later without notifying the financial service.

9. Lack of data collection methodology

Data for management reporting is collected from accounting and specialized databases. The lack of a unified data collection regulation causes duplicate data, duplicate counterparties and other inaccuracies.

We recommend that after developing a methodology for collecting data for generating management reporting, you check the mechanism for alienability. Any employee must be able to collect the necessary data.

10. There is no addressee for management reporting

All your management reports will be meaningless without the recipient. They must be reviewed and verified. And then used for effective enterprise management.

Management accounting in 1C

Management accounting can be implemented or optimized through process automation. There are several solutions you can use for your business.

Automation of management accounting in production, as well as in a wholesale or retail company using BIT.FINANCE will allow you to obtain information for making decisions quickly. The program reflects the situation at the enterprise in the “here and now” mode in a visual graphic form: tables, diagrams, graphs, sensors. The functionality of BIT.FINANCE is easy to customize for any enterprise.

The program is a universal tool for operational business management. In one information base, you can maintain several parallel accounting options based on common primary documentation and contracts. BIT.FINANCE will significantly simplify the process of setting up management accounting thanks to automation tools:

• centralized company treasury,
• budget planning for all types of budget (BDDS, BDR, BBL),
• on the preparation of consolidated statements for a group of companies,
• preparing reports in accordance with international financial reporting standards.

For small enterprises, the program “1C: Managing Our Company 8” is suitable. 1C:UNF is a ready-made comprehensive solution that implements everything necessary for non-fiscal operational accounting, control, analysis and planning. The solution helps improve the company's performance by providing owners and managers with a wide range of management tools, and employees with new opportunities for productive work. There is no unnecessary functionality, and everything your company needs can be easily configured.

In "1C: Small Cash Flow Management";

“1C: Integrated Automation 8” is a solution that allows you to maintain management accounting and obtain an analysis of the activities of your enterprise.

So, the Treasury

in 1C: Comprehensive automation allows you to manage funds that are in the organization’s cash registers, in its bank accounts, as well as control all its payments. This tool allows you to:

• plan the inflow and outflow of funds;
• reflect cash and non-cash transactions;
• control the availability of funds;
• control the intended use of funds;
• carry out cash payments in foreign currency;
• work with accountable persons;
• control mutual settlements;
• take into account credits, loans, deposits.

In the 1C: Integrated Automation 8 program, cash management allows you to organize:

• operational accounting of the actual movement of funds of the enterprise on settlement accounts and cash desks;
• operational planning of receipts and expenditures of funds of the enterprise - payment calendar.

"Performance Monitor"

with the help of key indicators, it allows the manager to see and evaluate the state of affairs in the company. The application solution includes a set of fifty “pre-configured” performance indicators and supports the rapid development of new indicators.

Features of the "Performance Monitor":

• plan-actual analysis of key indicators;
• tracking the dynamics of indicators;
• possibility of clarifying information;
• presentation of information in a clear and convenient form.

All management accounting data in the system allows you to timely track the possibility of deviations from the parameters set by the business strategy, as well as identify reserves (financial, material, labor) that have not been used by the company until this time.

Call us, we will help you automate management accounting. Our offices operate in 60 cities. The consultation line accepts your questions 24/7.

Report on the actual cost of production

One of the main tasks of each enterprise is to form a market price such that it covers the costs of producing the products sold, while being competitive, consistent with the quality of the products and ensuring market demand.

After a market or contract fixed price has been formed, it is necessary to try to maintain the cost - if the cost exceeds the price, the enterprise will not make a profit. You can control the situation using a management report on the actual cost of production (Table 7).

Table 7

Report on the actual cost of production, rub.

This report reflects deviations of planned costing indicators from actual ones. And if they are significant, additional analysis is needed to determine the reasons.

As a rule, at this stage of compiling management reporting, they also establish a group of costs that have the largest share in the cost structure and, on the basis of this, formulate a cost reduction policy to increase product profitability. For example, in order to reduce material costs, they renegotiate contracts with suppliers on more favorable terms or look for new ones; in order to reduce the wage fund, they reduce the number of workers, attract third-party organizations to carry out work, etc.

Taking into account measures to optimize the cost structure, an updated structure is planned for the next reporting period.

Let's consider an example of drawing up a planned calculation of the cost of production, taking into account the growth in volumes while maintaining general business expenses (as a constant component of the cost structure, regardless of fluctuations in volume) at the same level (Table 8).

Actual general business expenses per unit of production (see Table 7) - 41,642.70 rubles. with a sales volume of 257 units. products in the reporting period. Consequently, the total amount of general business expenses is RUB 10,702,173.90. (RUB 41,642.70 × 257 pcs.).

The planned sales volume for the next reporting period is 294 units. Let us divide the total amount of general business expenses (RUB 10,702,173.90) by the planned volume, and we obtain specific general business expenses per unit of production (RUB 36,401.95).

The remaining cost items are accepted for the planning period unchanged according to the actual data of the cost report.

Table 8

Planning the cost structure taking into account the proposed measures, rub.

We left unchanged all cost items included in the cost price, with the exception of general business expenses, which conditionally do not change depending on the growth of sales volumes.

Thanks to optimization, the planned specific profit per unit of production, while maintaining the retail price at the same level, will be increased by 5,240.75 rubles, by the total forecast sales volume - 1,540,780.50 rubles.

If no measures are planned to optimize costs, the planned cost structure, as a rule, includes actual data for the previous period.

Accounts receivable and payable report

The report on receivables and payables can be combined into one management document or divided into two independent documents. It allows you to assess the solvency of an enterprise and track debt turnover using relative ratios.

The very fact of the formation of receivables and payables is inevitable due to the temporary gap between payments and the transfer of finished products.

For your information

Accounts receivable are funds owed to the company by debtors; Accounts payable are funds that a company owes to its creditors.

A report on accounts receivable and payable is compiled as of a specific date, and the final recipient sees information about the status of settlements with counterparties and can quickly monitor the fulfillment of obligations.

An example of a management report on receivables and payables of an enterprise is in table. 9.

Table 9

Report on receivables and payables as of July 21, 2017

Analyzing the report data, the manager will see that on 06/09/2017 the company advanced 80% to Norman LLC (RUB 880,000.00). Products were shipped in full on June 15, 2017. But as of July 21, 2017, the company had not yet finally paid off its debt in the amount of RUB 220,000.00.

At the same time, Beta LLC made an advance (50%) in the amount of 5,500.00 thousand rubles, the products were shipped in full on June 23, 2017. But the company has not received the final payment of 50%.

As a rule, contracts with counterparties specify the terms of delivery and the time interval between delivery and final payment (for example, final payment is made within five working days from the date of acceptance of the delivered products by the buyer). For violation of payment deadlines, sanctions are expected (for example, a penalty in the amount of 0.1% of the amount of the delayed payment for each day of delay).

Therefore, in the event of claims from creditors, the company will be forced not only to make a final settlement, but also to pay penalties, and these are additional unforeseen costs.

Other management reports

Management report on the execution of the production plan

Contains planned and actual indicators. At the request of the final recipient, details are provided by workshop.

Ideally, these types of reports should be generated monthly. This will allow you to monitor the implementation of the annual production program and see the overall production picture.

Let us also draw attention to the fact that, as a rule, bonuses for production workers directly depend on the implementation of plans. Therefore, it is also possible to provide forms of an explanatory note in case of non-fulfillment of the production plan, which should be drawn up by shop managers or other authorized persons of the enterprise, making sure to indicate the reasons for the missed deadlines (for example, identification of additional faults, lack of necessary materials in the warehouse to complete production, etc.).

Management report on the execution of the marketing plan

The marketing plan (forecast of sales volumes), as a rule, is drawn up by the marketing department.

The report on the execution of the marketing plan reflects planned and actual indicators. Fluctuations of plan-actual values ​​within 10% are considered acceptable. Otherwise, it is necessary to adjust the plan taking into account the identified deviations.

In addition, it is necessary to analyze the reasons for deviations. Perhaps a competitor has appeared on the market with lower prices, buyers are not able to purchase goods at the offered prices, etc.

A management report on the execution of the marketing plan allows you to “keep your finger on the pulse” regarding fluctuations in the external environment and quickly respond to changes:

• monitor the actions of competitors (including potential ones);
• increase or maintain the competitiveness of the enterprise;
• monitor the demand for products and the solvency of buyers.

Management report on work in progress

Work in progress (WIP) is products that have not completed the entire production cycle. The share of costs for work in progress in the total costs of an enterprise can be quite significant.

As a rule, the management report for work in progress is detailed - all costs included in the cost are indicated (material costs, labor costs, overhead costs, etc.), the percentage of work completed and the expenditure of funds according to the standard (for example, materials were spent in the amount of 1000.00 rubles ., and the standard for finished products is 2000.00 rubles, therefore, the percentage of expenditure is 50).

The report may also include data on the labor intensity of the work.

Report on stocks of raw materials and materials

Stocks of raw materials and supplies must ensure the uninterrupted production process.

Suppliers often offer discounts when purchasing large quantities of goods, raw materials, and components. But businesses should remember that the costs of maintaining and storing these inventory items may exceed the benefit received from the discount. At the same time, by purchasing large quantities, you can save on transportation costs.

As mentioned earlier, one of the reasons for failure to meet the production plan may be a lack of materials in the warehouse. Therefore, a report on inventories of raw materials and supplies must be generated in accordance with the production plan.

This report is usually generated by the supply structural divisions of the enterprise (materials and technical supply department, material support service, etc.).

When planning inventories of raw materials and supplies, it is necessary to take into account production plan data (usually annual) and standards for the consumption of raw materials and materials per unit of production. You should also provide an insurance stock of materials in case of changes in the external environment (increasing demand, increasing the delivery time of materials, increasing the cost of inventory, etc.).

The management report on inventories of raw materials and supplies should also reflect actual indicators linked to the production plan.

Finished goods inventory report

It is necessary to create stocks of finished products to ensure the uninterrupted production process. But even here there are pitfalls: an increase in inventories of finished products also increases the cost of storing them. And in the event of a decline in demand, these finished products may not be in demand at all. The situation will only get worse if the product is perishable and has a certain expiration date.

The enterprise should establish such an optimal volume of finished product inventories that will meet the needs of consumers.

The report includes planned and actual indicators. Sometimes managers require additional information - the planned volume of production and sales, so that all movements of finished products are presented in one management report.

In addition, similar to the report on inventories of raw materials and materials, here you also need to take into account the safety stock in case of defects in production, unforeseen and force majeure circumstances, as well as in case of deviations of the sales volume forecast from actual indicators.

What is management reporting and what is it used for?

Enterprise management is a continuous process, the essence of which is influencing an object in order to stabilize, control or change it in accordance with business objectives. Another management function is the rational use of the company’s workforce and resources to increase profitability.

To keep a business efficient and competitive, managers must make certain decisions all the time. These decisions are based on current information about the affairs of the enterprise. This is exactly the information that management reporting (MA) provides to management.

Management reporting is a company’s internal control tool and a way to assess its economic prospects.

Unlike financial reporting, no one obliges you to prepare management reporting. But managers need it to effectively manage their business. The MA contains information about all structural divisions of the enterprise.

It can be argued that a competent manager is able to evaluate economic indicators based on accounting records. This is partly true, but accounting does not reveal all the nuances of the enterprise.

It is difficult to understand from accounting reports which products are in high demand and which are the opposite. Management accounting shows a more clear picture.

Example

expanded its product range last year. With the help of management reporting, which the executive director proposed to introduce at the enterprise, management found out that the products “Family Dumplings” and “Village Sausage” are in greatest demand. We decided to increase the production of these items.

The MA also showed that purchasing packaging materials from suppliers is less profitable than making them yourself. The director decided to open a new workshop for the production of his own packaging.

Reporting is needed by economical, far-sighted and prudent owners who want to make a profit not only by increasing production volumes, but also by increasing labor productivity, as well as reducing unnecessary expenses. This is an integral part of competent budgeting in an enterprise.

Who is the customer of management reporting? TOP managers and line managers - production directors, financial directors, sales managers, etc.

To compile a document, various forms are used, most often tables, graphs, and diagrams.

The information should be:

• reliable - reflect real processes without any additions or manipulations;
• targeted – addressed to specific users, for example, the general director;
• confidential - there is no need for outsiders to know about the internal affairs of the company;
• operational – ready for use at the right time and containing up-to-date data;
• useful for making management decisions.

Where can I get data for reporting? From accounting programs, financial documents, accounting reports. To begin with, of course, you need to establish a functional system for transmitting information at the enterprise.

For example, consumables have gone into production from a warehouse - the responsible persons (storekeeper and workshop manager) must document this matter.

In a large enterprise, it will be difficult to cover all aspects of production, so those responsible for drawing up the MA must act according to a pre-developed plan.

— “ Comrade Novoseltsev , is this your report? You need to deal with the matter seriously or not at all. Statistics is a science; it does not tolerate approximation. How can you use unverified data? Take it and remake it!”

From the film “Office Romance”

Novoseltsev with a report - a still from the film Office Romance
Now I will list the main tasks of the MA:

• providing management with reliable and up-to-date data regarding the financial and production activities of the company;
• forecast and analysis of the operation of the enterprise and its branches;
• increasing financial discipline;
• reduction of production costs;
• increased profits as a result of making economically feasible decisions.

The MA does not need to be sent to the Federal Tax Service or anywhere else. This is a document for internal use. It allows managers or owners to be aware of the objective situation at the enterprise. The document reflects the main processes that occur or occurred within the company during the reporting period.