Management reports enable you to make better decisions about where to spend your money in order to increase profits. Here are some tips on how to clean up your accounting and do better management reporting.
Do Management Reporting Monthly
It's a good idea to sit down at least once a month to review your financial statistics with your leadership team. It can be a great way to get back on track for the upcoming month and to decide what areas you need to focus on. This also gives your bookkeeping team a good deadline for having the accounting information ready, which helps them to stay organized and enter new information in a timely fashion.
Follow Your Industry's Trends
Each industry has specific statistics that they rely on heavily in order to make management decisions. For instance, industries that are service based may monitor their billable and non-billable hours closely. Product based businesses need to look at their overhead costs to see how efficiently they are producing their product. Many industries look at their marketing spendings in order to see how much effort it takes to attract new customers. Read up on your industry's accounting procedures and make sure that you are following the best practices for management reporting.
Base Personnel Decisions on Statistics
It's always a good idea to have the statistics to back up your decisions, but it can be extremely helpful in making personnel decisions. When you decide to fire, promote or give a bonus to one of your employees, having the data to support you can make the process seem fairer. You can also help employees understand how they can improve by using management accounting statistics.
Get Consulting for Your Accounting
The decisions you make based on your management reports are only as good as the information you receive. Hire an accountant to do your management accounting so that you can get the most accurate results possible. Even if you have an in-house bookkeeping team, an accountant can double check to make sure that all of your profits and expenses are placed in the right categories and make sure that the statistics are calculated correctly.
Your accountant is a great resource for deciding how you can clean up your accounting procedures in order to do better management reporting. They may suggest new statistics that you should track, or help your team become more organized at recording financial data. When done correctly, management accounting can be an invaluable source of information for your team. Talk to a professional, like Dale K. Cline, CPA PLLC, to discuss how management accounting can benefit your company and how to start implementing it today.