June 18, 2020 - Every owner wants peace of mind from having a reliable and predictable business.
Reporting is the foundation of the – reliability element of business management. Reliability in reporting means routinely being accurate, verifiable and complete.
Reporting is not known for being a ‘sexy’ part of business, probably more synonymous with ‘boring accountants’ but good reporting is definitely one of the 5 essential pillars of the financial management ecosystem.
According to the Chartered Institute of Management Accountants (CIMA), to be useful information for board reporting, financial information must be material, relevant, reliable, comparable, and understandable.
Good reporting will bring clarity and give you and insights into the performance of the business, giving confidence to base important decisions upon.
Peter Drucker once said, “You can’t manage what you don’t measure”
Reporting is the feedback mechanism for how your strategy is playing out. Management reporting should be a dynamic activity – one that can, and should be, continuously improved
The most effective boards collaborate with management to create well-defined key performance indicators (KPI), comparisons, and benchmarks to monitor performance. The challenge is for directors be to select and monitor the metrics that are the most relevant to their organizations. Well-designed board reporting packs will provide meaning and insight, and they will also have foresight for what lays ahead.
High-quality financial and management performance reporting should contain all the information the board of directors needs to make decisions about corporate governance, to oversee the development and execution of corporate strategy, and to execute specific duties in audit, risk, and compensation.
The reporting pack is the key source of information for directors prior to a board meeting. Distributed in advance, Directors can be ‘brought up to speed” allowing for more effective use of a limited time together in a face to face meeting is a result of their diligence prior.
Reporting is one of the 5-Pillars of ‘Profit Metrics’. The ‘Profit Metrics’ method embeds reliability and predictability into business finances. It allows owners to anticipate, evaluate and navigate. It enables them to get out in front of the business, be strategic and boost their bottom line.
For more information about Profit Metrics, please click here