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How do I Write a Management Accounting Report?

By D. Nelson
Updated May 16, 2024
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A management accounting report is used by any business owner or manager in order to determine the current financial status of his or her organization. It may also be used to determine how best to proceed when it comes to future operations. A good first step to take when it comes to creating a management accounting report is to decide what goal you would like to achieve once the report has been made.

Management account reporting may have three different goals. If you wish to develop strategy, the report should allow you to decide on how best to proceed in a specific project, expansion, or marketing plan. Management accounting can also help a business owner or manager make plans according to risk management, which predicts potential shortcomings and losses. Finally, accounting reports can help optimize basic organizational performance relating to labor, assets, and cash flow.

Once you have decided what you would like to learn from your management accounting report, the next step is to collect data regarding cash flow, income, and economic and financial forecasts. Any other pieces of information that will help you to better run your business or organization, such as shareholder equity, should also be included. These documents are printed up so that they may be easily compared and analyzed.

Effective management accounting reports often place the numbers of each year side by side so that gains and losses may be easily observed. Many who create these reports will add a column for percentages. This allows those viewing the report to better understand the degree of the changes that annually occur.

The printed documents make up the basics of management accounting. It is important that these documents are distributed to all who take part in the analysis of the budget and the planning of operations. The documents are most often be viewed by managers, accountants, and, when applicable, shareholders. In smaller businesses, the management accounting report may be taken to a consultant who will advise the owner how best to execute future projects.

In larger organizations, there is normally an accounting department. The gathering of necessary data is often prepared by this department. In smaller businesses when an accountant is not present, this data can be organized with one of many computer programs that specialize in providing management accounting help. In some cases, small business owners hire third party accountants to assist in the collection and analysis of data.

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Discussion Comments
By allenJo — On Aug 01, 2011

@MrMoody - We do something similar in our business. We have a permanent accountant on staff and he produces the reports. We have yet to see a need for outside accounting firms to help us, although we are still in our growth stage as a business and may need that down the road.

There are two things I’ve noticed however. Executives love graphs and they love dashboards. A dashboard (borrowing from the automotive concept) puts all the reports in one place, to so speak.

It has snapshots of data. The software program that we use allows up to six dashboards in one screen. These could be anything from data comparisons, charts, pivot tables or whatever.

You can see all six at once, divided up in different sections of the screen. The boss really loves the dashboard, because it gives him a quick snapshot of where he’s at, when he has very limited time.

By MrMoody — On Jul 31, 2011

In our small business the company produces a business report each year that we review together.

Our primary focus is on cash flow. We are a software company and have limited capital expenditures. All of our real investments are in our code base and in our people, the intellectual capital so to speak of our business.

Our main emphasis on cash flow, of course, is how much of it we actually have in any given month. Of course, some months will be better than others. Summer is cruel for business. Everyone is on vacation and so forth.

However, the boss usually takes money from the better months and uses the surplus as a buffer for the weaker months. I think that makes business sense.

We also review new business strategies for generating cash flow, like real estate investments or other things like that. The report is very informative, and gives everyone a chance to give their input.

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