Management Information

Management Information (MI) is data or statistics which are collected and used to measure performance in given areas of a business - and drive change for improvement where needed. It is in most businesses usual to present MI on a monthly or quarterly basis as part of a management accounts pack, which should contain not only the profit and loss account, and balance sheet but additional information that highlights key areas in the business.

We believe that meaningful MI should in fact be produced on a weekly basis, and whilst weekly financial and operational controls are difficult to set up, once in place they evolve as the business develops and provide an accurate weekly snapshot of business performance ensuring senior management are kept abreast of all key issues impacting on their business, no matter how diverse or through how many divisions they are managed. The weekly MI may include:

  • Snapshot (Flash) weekly P&L
  • Sales movement by customer
  • New business gains & current sales targets
  • Health & Safety issues
  • Areas where short term additional management support is required
  • Review of KPI’s and measurement against any contractual requirements
  • Targets and specific actions for the following week

This weekly MI will become increasingly more accurate and invaluable to the business both financially and operationally as time goes on, this is because they are tied in to the formal monthly management accounts in a way that ensures any movement in costs is reflected in the base model for the Flash P&L and as more is learnt about the micro management of the business the more KPI’s can be developed to provide accurate real time data to add identifiable benefit to both internal and customer focused requirements of the business.

Do you have management accounts, and do they identify all the key issues affecting profitability? Do you monitor and compare actual performance against anticipated targets within your P&L and also effectively manage your Balance Sheet?

Inspired Business Vision produce tailored reports that will identify key performance areas, which can be easily interpreted. These will explain the important issues affecting profitability and assist with the management of your balance sheet.

The key principles of MI are that it should be:

  • Accurate (correct numbers supported by any relevant quantative information)
  • Timely (Available sufficiently quickly to allow managers to act on it)
  • Relevant (Something that can be acted upon if required to improve performance)
  • Consistent on a period to period basis to enable trends to be established

Management Accounts

Management accounts can help you make timely and meaningful management decisions about your business.

Different businesses will have different management accounting needs, depending on the business areas that are important to them. These can include:

  • the sales process - such as pricing, distribution and debtors 
  • the purchasing process - such as stock records and creditors
  • a fixed asset register - details of all fixed assets, including identification numbers, cost and date of purchase, etc
  • employee records

There is no legal requirement to prepare management accounts, but it is hard to run a business effectively without them. Most companies produce them regularly - e.g. monthly or quarterly.

Management accounts analyse recent historical performance and usually include forward-looking elements such as sales, cashflow and profit forecasts. The analysis is usually performed against forecasts and budgets that have been produced previously.

The information in management accounts is usually broken down so that the performance of different elements of the business can be measured. For example if a business has more than one sales outlet, there might be a separate report for each. There may also be a report produced to show how well a particular product has done across different outlets.

For businesses selling more than one product, it is advisable for example to provide a financial breakdown for each product category. This will allow you to ensure that profitable products are not subsidising those that are selling poorly, unless you intentionally promote loss leaders to attract further custom.

Accurate and timely financial information is essential for a growing business.

Contact Us  now to see how we can help your business produce enhanced management information to assist in the development of your business.

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