The importance of a quality management report

Why don’t you meet a profit plan? Why does the company show high profits and still have no funds to pay dividends? How is it possible that company generates free cash-flow and is in a long term loss? Why are sales not as expected as planned in the annual plan? If you are asking at least one of the following questions, we will use the following article to guide you to the solution. In this article, we will have a look at the importance and quality of the management report and why it is actually a good idea.

Owners and representatives of statutory bodies of companies are interested in how their companies are doing or what are the causes of the performance decline. That is why they often themselves the above mentioned questions. But not only in this case can be management report helpful for you. You may just feel like you need to relax and no longer want to live with your business every day, but you also want to keep track of your business. The other reason may be that they have entered the capital and want to know where the invest money is going and how the company result develop.

What are the options? Either these rounds of analytical questions and answers will be completed by company representatives personally and will demand answer from CFOs, accountants or other people in the company, or they can rely a quality management and control-oriented report to provide them with regular answer to most questions.

The main goal of management and control-oriented reporting is to gather information from all levels of the company, evaluate it, look for unnecessary costs, look for new profit opportunities, but also to discover critical points in the company. It closely monitors the structure of sales, costs, margins, product margins, customer or order margins etc.

Managerial reporting evaluates the company’s past, present, but also looks into the future. It provides the ability to plan how financial indicators will behave in a few months or years.

The formal and content aspect of such a report shall be consistent with the information they wish to submit. In our view, it is important – especially when it comes to reporting to owners or top management – to avoid a large number of tables and large reports that, unfortunately, may not even be read. The main output is a well-prepared summary report in the standard range of one A4, so-called a dashboard with more detailed reports depending on your business needs, where you can find key business metrics. This will give a quick, comprehensive and truthful picture of its financial situation, performance and ability to generate free cash.

If you also ask yourself some of the above-mentioned questions or if you are interested in managing the company through quality reporting, the team of experienced VGD experts will “tailor” such a report and take into account your information needs.

Something unclear?

We will advise you! 

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