Companies and businesses prepare various types of reports. These include both external and internal documents prepared for informed decision-making and other purposes.
Of these, the most prevalent external reports include the financial statements. These statements provide meaningful information to both a company’s internal and external stakeholders.
However, financial statements have a set format and do not provide details about transactions and other factors. Therefore, companies also prepare internal reports that provide detailed information. This information is usually relevant to decision-making for internal purposes. The most common type of internal report is managerial reports.
What is a Managerial Report?
Managerial reporting refers to the process of presenting information to managers to help them run their operations efficiently. It includes the collection of data that can provide detailed information about a company’s operations.
As mentioned, this information usually includes more details compared to other reports. Managerial reports also incorporate key performance indicators and help guide managers towards well-informed decisions.
Managerial reporting is a term that describes business intelligence that involves reports to help managers. These reports can help managers monitor operations and performance. Managerial reports form the core of various business and enterprise technologies. Usually, these reports contain both qualitative and quantitative information.
Managerial reports involve a wide variety of information and can provide significant knowledge about a company’s operations. They may include business results, risks, finances, and issues. Furthermore, these reports also vary from one company to another. Usually, managers prepare managerial reports to present to executive management, governance bodies, or senior managers.
Managerial reports are fundamental in organizational strategy and decision-making. They are a part of management accounting, which usually includes looking at costs, variances, profits, processes, etc. Although not similar to the financial report, managerial reports also present financial information. These reports can also contribute to the financial statements prepared by companies.
What is the purpose of Managerial Reports?
The purpose behind preparing managerial reports differs from one company to another. Every company will have a specific purpose for every report prepared. Despite that, however, there are some prominent purposes that managerial reports fulfill. Some of the primary objectives of managerial reports include the following.
- Help managers monitor and track key performance indicators and other performance metrics.
- Allow companies to set goals and milestones.
- Reflect on the status and health of a company.
- Remove uncertainties from strategy implantation.
- Help determine the profitability of products, services, departments or clients.
- Allow better decision-making about the distribution of resources.
- Help determine the best use of resources for maximum efficiency and effectiveness.
- Make decisions related to the selection and acquisition of resources straightforward.
- Create cohesive communication regarding the data collected.
- Make pricing products and services straightforward and produce accurate results.
Overall, managerial reports aim to provide information to managers about a company’s operations. These reports consider various aspects of a company. Through these reports, managers can make well-informed decisions.
Managerial reports also track several key performance indicators and present them in an understandable way. These reports form the core of a company’s decision and strategy making processes.
What Are the Key Points to Include in Managerial Reports?
Managerial reports are an internal process. Therefore, this process may differ from one company to another. Each company will have a specific report format that managers must use to prepare managerial reports. However, there are some key points that every managerial report must include. Some of the crucial ones are as below.
Strategic goals and objectives
Every managerial report must include the strategic goals and objectives in mind. It shows the reader what the purpose behind creating such reports is.
These goals and objectives will also dictate how the other areas in the report will differ. Similarly, it will give the managers who prepare their reports a better idea of what they need to include.
Key performance indicators
Key performance indicators (KPI) help managers exemplify how their department is performing. Each department within a company will have specific objectives and goals.
KPIs are a set of metrics that measure how the department performs in achieving these goals. These KPIs will vary based on the department for which the report is and the audience.
Presentation is a critical part of any managerial report. Every report must tell a story to the audience and guide them through the hard data and figures.
Through presentation, managers must make these reports easy to understand. Managerial reports must also follow a logical sequence with clearly defined sections. This way, managers can better communicate their information.
Managerial reports shouldn’t be bland. They must also include visuals that help readers better understand the information presented. These visuals may include charts, graphs, diagrams, tables, etc., to make data more presentable.
However, visuals must only focus on critical areas to help users focus on what is important. These visuals will also make managerial reports more readable and presentable.
Managers should also incorporate customer feedback into their managerial reports. Through these, the readers can understand what customers think the company is doing right or wrong.
It also helps managers present a more accurate and data-driven strategy in their reports. Managers can also use customer feedback to support their message or opinion.
Clear and concise
When preparing managerial reports, managers must keep the message clear and concise. There is no need to present irrelevant information.
Managers should also keep their audiences in mind and prepare their reports in the clearest way possible. The intention of these reports should be not to overload the readers with irrelevant information. However, it should drive the point to them.
What should Managerial Reports include?
Apart from the above content, managerial reports must also include some other sections. These sections aren’t necessarily crucial. However, they can enhance the understandability and presentation of managerial reports. Some of the things that these reports should include consist of the following.
A managerial report should include a cover page. Managers must use their logo or trademark on the cover page to help their reports look more presentable and professional.
Mission, vision and values
Managers must also include their company’s mission, vision and values. These statements will help summarize the company’s strategy.
Table of contents
Some managerial reports may include detailed content. For these reports, managers must contain a table of contents to help readers better navigate these reports. Usually, the table of contents must appear first to make it easier for users to find what they seek.
Organizational scorecard views
Managerial reports must also include a detailed overview of a department of organization scorecard. Managers should organize these to be readable.
Managerial reports must also include detailed sections that focus on each strategic goal or objective. However, these must follow the key points discussed above.
As mentioned, managerial reports must include charts, which can help illustrate data visually. These charts can also help managers present information about KPIs and their measures.
Managerial reports should also include a review of the projects that drive a company’s strategy. These must not overview all projects.
Managerial reports must include an action items area that captures crucial decisions from meetings. It is one of the purposes of these reports to present data to inform strategy and the relevant decisions.
Managerial reports are that present information that is relevant to decision-making and strategy development. These reports have several purposes, including tracking KPIs, presenting information, setting goals and milestones, etc.
Managerial reports must include several key points, as discussed above. Apart from these points, managerial reports must also contain other sections.