Eight Steps to Improved Reporting

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Caution!  Your company reporting can be stale, lifeless and unchanging.  

Some companies haven’t changed their reporting in years, and the intra month reporting may be – at its best – informal and undocumented… merely conversations in periodic meetings.  Responsibility and accountability are neither effectively delegated nor managed in such situations. In other extreme cases, reports are so voluminous and detailed that business trends are not identified, and performance cannot be effectively monitored and managed. Do these scenarios sound familiar?  It is time to challenge yourself to improve your reporting, considering the following eight factors:

1. Reporting is not just the finance department’s responsibility.  Periodic business reporting should be a formal communication within the Company to discuss the results of all operations – not just the sales and manufacturing departments.  Reporting should be more than a monthly P&L, Balance Sheet and Cash Flow.  Each functional area should provide a status report of their performance, which should include performance metrics (e.g. production statistics, quality statistics, number of calls made, new accounts opened etc.), financial reports (e.g. sales, pricing, expense and capital spending, variance reports), and often other factors (e.g. headcount, order or account aging, manufacturing cycle time, orders shipped complete & on-time).

2. Reports should always compare the results with goals and/or history to gain perspective on the company performance.  A relative performance measure is more effective to manage responsibility.

3. Reporting should be modified to reflect the current company strategy.  How often have we seen a traditional P&L and Balance Sheet, when the most important Company priority is a new product launch?  Report against the year’s key strategic objectives – new product launch, M&A program status, geographic expansion, R&D project progress, etc. – to focus the operating team on key priorities.

4. Develop reports that measure performance at thestrategic as well as tactical levels.  Develop reports that identify business trends and industry information so that you can measure competitive performance at the company or functional level … benchmark company performance.

5. Layer reports to provide information to the appropriate management level …more detail to those deep within the organization.  For example, a territory sales manager will receive customer level information, while a district manager, responsible for several territories, may receive territory summary information.

6. Develop reports that provide operating management the information to monitor performance and make decisions.  Ask the operating executives what they need to manage effectively, and then give them the information – consistently prepared, always correct and on time.

7. Reports should be prioritized by time… for example, reports may be daily, weekly, monthly depending on their use.  In smaller functional areas, reporting may be as simple as a blackboard summary of the shift’s production. 

8. Reports should be timely – if it requires a week to prepare a daily sales report, the report is useless… operations management cannot manage using the outdated information.

Ideally, as the company strategy is updated annually, the strategic keys to success will be identified so that the organization can adapt the reporting to manage strategic priorities.  The entire management team should participate in the development of the report content, frequency, timing and recipient.

Once reports are defined, prepare definitions so that business managers understand the meaning of the reports, and train personnel in their preparation so that the reports are prepared correctly, consistently and on time each reporting period.  Try these 8 steps to make your organization more effective.