Management Reporting: 8 Best Practices to Create Effective Reports

Reporting Oct 15, 2021 13 minutes read

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    Peter Caputa

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    Big numbers and rough notes make little sense unless they’re properly packaged and presented. Management reporting helps achieve exactly this.

    Without it, your company’s management has data flying in from all directions, making it challenging to pick out important data bites for meeting business targets.

    With a management report though, information from different departments of a company is properly tracked, packaged, and presented to the decision-makers. This helps them in making well-informed, strategic moves that benefit year-round business goals. In addition to this, according to Databox’s State of Business Reporting, in most companies, the management is not only able to read and interpret data – but is also in charge of making reports.

    So it makes sense to say that the usefulness of management reporting lies in how efficiently it’s done. To this end, it’s important to understand what makes a beneficial management report.

    And to help you out, we’ve created this guide to explain this and more. Here’s what you’ll learn:

    What is a Management Report?

    A management report provides up-to-date insights or key performance indicators (KPIs) about the functions of various business departments in an easy-to-understand manner.

    In other words, managerial reports inform managers and leaders about the ups and downs of the business and their goals over a time period. This helps them reflect on and address different aspects of the business and make data-informed strategies that align with the organization’s aims.

    Wondering which report format is best for reporting to the management?

    We asked respondents from different business sectors. Of these, 14.8% of respondents belonged to the SaaS sector, 25.9% to eCommerce, 29.6% to a marketing agency, 14.8% to professional services, and 14.8% belonged to other sectors. 

    What best describes your business

    59% of these folks use presentations to report to management. 40% choose spreadsheets for sharing data with some 38% using written documents. 33% use centralized dashboards with the remaining 8%, using other methods.

    How do you report to management

    Difference Between Financial and Management Reports

    Briefly, the difference between these two reports lies in their target audiences, use cases, and the details contained within.

    The thing is: financial reports are made in accordance with GAAP guidelines and cover the financial overview of a company over a period of time – monthly, quarterly, or yearly.

    Such reports are for external use such as legal purposes. Meaning: their target readers are investors and regulators.

    Because financial reports provide information on past accounting, they’re of little to no use for making future decisions for maintaining a business’s competitiveness.

    This is where management reports come into the picture. Although based on numbers like financial reports, these reports are very different.

    Essentially, management reports are for business owners and managers, providing granular details about operations held in different segments of an organization.

    Since this type of reporting is for internal use, it doesn’t have to follow GAAP guidelines. It’s also not mandatory as a financial report is.

    Related: Business Report: What is it & How to Write a Great One? (With Examples)

    Management Reporting Best Practices

    Frequent management reporting comes with a slew of benefits. It allows for accuracy in decisions, staying focused on customers, and helps with identifying problems to solve them early on, saving both effort and time.

    However, a management report is of no use if it is ridden with errors, has poor information, or is presented inefficiently. So, what can you do for ensuring proper management reporting?

    Here are 8 management reporting best practices to help you out:

    1. Start with the objectives
    2. Always include KPIs
    3. Keep the report to the point
    4. Make sure it is visually appealing
    5. Tell a story
    6. Involve all the teams
    7. Consider your audience
    8. Strive to improve

    1. Start with the objectives

    First things first, make sure your report has defined objectives.

    Mention these at the beginning to keep them at the front and center of your readers’ minds. Since managers and CEOs have busy schedules, it’s easy for them to get lost in numbers that provide little to no reference or explanation from the start.

    Elaborating on the importance of sharing goals at the start, Aqsa Tabassam from Ray PCB says, “For your management report to have any weight at all, it is critical that you highlight your key goals and objectives from the outset.

    All the data analysis and strategies contained in a management report have one clear purpose: to help a firm achieve its business objectives. If you don’t outline your firm’s goals and objectives at the beginning of the report, all the data contained in the later pages would be rendered meaningless.”

    Sharing their experience, Tabassam adds, “I ensure that whenever I have to prepare a management report, I clearly define my company’s key objectives in the first few pages. This gives the readers a point of reference for the contents of the report. It allows them to understand how the organization is aligning its strategies to its long-term goals.”

    Mentioning goals at the start will not just benefit the reader but will be also helpful for you – serving as a reminder to see what KPIs you are tracking and what performance factors need to be part of the report.

    2. Always include KPIs

    KPIs are central to management reporting. Without them, reporting can prove to be futile. These also give a clear idea of how the business is operating by helping measure the goals and performance of each department.

    In short, KPIs show managers what is working and what’s not working. Without this data, your project management reporting dashboard can’t be based on facts.

    Ben Wallington of Designerwear agrees, “Management reporting can be pretty pointless if it doesn’t do what it’s supposed to. Your management report must involve a key performance indicator. This helps everyone in the company see if tactics are working at a glance and if the company is heading in the right direction. It is the best kind of monitoring that a company can do.”

    However, try not to squeeze in every other metric in your management report. Why? Because an effective managerial report contains only important data so as to not confuse the reader. This way, you can provide a solid foundation for the conclusions you’re making in the report.

    Here’s a quick peek at the KPIs that are essential according to our contributors:

    Most important management KPIs

    Related: 5 KPI Management Best Practices to Consider in 2021

    3. Keep the report to the point

    Your management report needs to be “clear and concise” in the words of James Khoury of Zendbox. After all, the purpose of such a report is to make things easy for the management.

    Two things that can help here:

    • Use simple words. Any jargon or difficult words will only make the report challenging to understand.
    • Write key takeaways instead of long paragraphs explaining the information you put in the report.

    As Khoury points out, “Although the reports will contain tremendous amounts of data, you should ensure it stays clear and concise with easily read summaries and objectives – there can be no room for misinterpretation. All managers can then take the information away and make sure their teams are aligned.”

    To make your report easy to read, you can use bullet points and make sure the document has enough white space. Furthermore, cut out any redundancy and make the report scannable. Vertical Leap’s Lee Wilson is of the same view.

    “Reporting to management needs a clear narrative, targeted takeaways, and close alignment to business (and likely department) objectives,” Wilson comments.

    Remember: your goal should be to present all the data to the leaders briefly.

    4. Make sure your report is visually appealing

    Blocks followed by blocks of text can be heavy on the eyes.

    To make the management report digestible, your report needs to be visually balanced. You can do this by balancing data with some imagery. What sort? Charts and screenshots. You can also make your report interactive.

    Most of all, focus on visual hierarchy whereby you place important information first. Don’t forget to make sure your report draws attention to key pointers immediately.

    In this regard, ReVerb’s Mary Plahonina shares: “To make my reports efficient and organized, I combine documentation with screenshots from the task management software. The KPI dashboard displays our top priorities, completed tasks, and project timelines. With such an approach, we can easily track work progress and ensure that we deliver all projects on time.” See other free project overview dashboard examples here.

    What’s more, as a rule of thumb, select a font style and size that are easily understandable. Lastly, use brand colors for making an on-brand visually appealing report.

    5. Tell a story

    Storytelling is a great way to keep your readers engaged and explain where you’re coming from. In management reporting too, storytelling can be used to explain segment operations and what can be done to improve.

    For instance, compare past data with present one to tell managers how your team has improved over time or can do better. Other than comparing past and present data, you can compare factual data with targets for the period too.

    Such storytelling can help in convincing the authorities when it comes to making certain changes for business success. As Khoury of Zendbox pinpoints, “You can use the reports as a tool to guide managers on to their next steps and support action plans.”

    Wallington also credits visuals and storytelling for making reports more convincing. Says Wallington, “What works for us is management reporting [that is] executed in a visual manner.

    There is a bit of storytelling involved in this, the reports are simply more engaging and easier to read this way. It is more effective than just a bunch of numbers on screen. Pie charts, explanations, and conclusions included in the report make for better management reporting.”

    Related: How This 2-Person Agency Helps Clients Understand The Story Behind Their Data

    6. Involve all the teams

    There should be no disconnect between managers and their teams. After all, communication is key and will only aid in decision-making. Alex Maklakov of MacKeeper credits the practice of involving all employees in the management reporting process for improving it.

    Maklakov shares, “One practice that massively improved our management reporting was onboarding and educating entire teams about the process. If there is any disconnect anywhere between the employee and the C-Suite, it will reflect on the report.

    Everyone should be clear on how the data is collected, processed, and represented. This practice is even more important if you’re rolling out new technology at your company.”

    This practice of collaborating with teams keeps employees engaged and informed, which helps them focus on the objectives at hand. To add, it enables managers to look at matters from a different angle, enabling them to make better decisions.

    You can also bring all the teams together for getting an eagle’s eye view of each department’s progress. Talking about this, Khoury od Zendbox advises, “Bringing all departments of a business together you can get an overarching view of performance through the organization – see what areas need to develop and what would ultimately create a more successful business.”

    7. Consider your audience

    Your management report should satisfy its audience – this can be managers, founders, or other internal authorities. A straightforward way to know what the superiors in charge want is to simply ask them.

    Donna Duncan of B-SeenOnTop suggests, “I always ask management to share what keeps them awake at night. I think about the data we have or could collect that would shed light on how well the company is doing relative to that concern.”

    Our respondents agree with 73.3% saying they focus on what their audience wants to know in addition to what they should know.

    In contrast, only 20% say their sole focus is on what their audience must know and 6.7% admit they focus on what their audience wants to know.

    Where do you focus on when reporting to management?

    Additionally, for your management reporting to be useful to the managers, it shouldn’t just contain numbers and outcomes but recommendations as well. Make sure each piece of info you add in the report is meaningful to your readers.

    Wilson from Vertical Leap defines how you can go about doing this: “Each segment or slide needs to have a purpose that reflects the audience requirement, steering the outcomes away from data assumptions and into meaningful insights.

    As a best practice tip, consider the roles and functions of people the report is intended for, and verify you are providing something valuable to each.”

    8. Strive to improve

    While you may think your management reporting skills are at par, you can always do better. The goals and objectives of businesses are always evolving, and with that, your report needs to as well.

    Testing is crucial to ensure there is no inefficiency in your reporting. Double-check if your management report is filled with KPIs or data that aren’t required.

    Adapt to the changes in the digital landscape and apply new techniques that can better explain your points. This way, you can stay ahead of the competition.

    Apart from studying what tools and tips can be implemented, you can also directly ask managers if you can improve your managerial report.

    Duncan of B-SeenOnTop does this as well. After highlighting data relevant to the management’s concerns, Duncan asks the “management to confirm whether it is helping or not.”

    Wilson from Vertical Leap takes the same approach: “Remember to verify after the report is provided or discussed, that the audience is happy with the outcome, or any further refinements that can be made for future versions.”

    Doing so can also save you from any tweaks that may be needed after submitting your report.

    To reiterate, management reporting focuses on measuring and tracking performance metrics and presenting them in a concise manner.

    The goal? To help management know how different segments and departmental operations are doing and serve as a guide to take the next steps. With financial reporting software like Databox and the steps outlined above, you can achieve this easier than ever before. Sign up for a free trial today to get a holistic view of your company’s performance.

    Article by
    Masooma Memon

    Masooma is a freelance writer for SaaS and a lover to-do lists. When she's not writing, she usually has her head buried in a business book or fantasy novel.

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