Management reporting. Difficulties in reporting

Must provide all users with the information needed to make decisions. Therefore, you need to decide on the list of management reports and their content.

It should be noted that this work, unfortunately, does not have any clear and unambiguous technology. We can say that developing management reporting forms is a kind of art.

After all, you need to be able to develop formats for management reports that, on the one hand, would contain truly useful information, and on the other hand, the cost of obtaining this information would be acceptable to the company’s management.

By the way, questions about the relationship between utility and cost will arise throughout the entire installation and automation project management accounting.

Thus, this article discusses all practical aspects associated with the development of a management reporting system. In particular, when developing management reporting formats, it is necessary to take into account the main characteristics that they must satisfy.

In addition, this article presents a classification of management reporting and indicators that may be contained in it.

Characteristics of management reporting

Management reporting can mainly be characterized only by qualitative requirements. Although some companies may use quantitative parameters.

Perhaps the most common quantitative characteristic of management reporting is the number of pages in the management report. It is believed that one report should be placed on one page, otherwise it will be very difficult to analyze. True, it does not specify what page format we are talking about and what font.

In some companies that strictly followed this principle, I have seen reports printed on an A3 page, and in very small print. Yes, formally these reports were placed on one page, but it was very difficult to use them.

In general, you should not apply this quantitative limitation so straightforwardly. If a management report is placed on two A4 pages, and, indeed, no data from such a management report is superfluous, then it is not at all necessary to print it in very small print in order to place it on one page.

Although quite often, upon closer examination of such long management reports, it turns out that they can quite easily be placed on one page. One company, for example, had a management report that, despite using very small font, barely fit on two pages.

Moreover, significant articles of the management report were not detailed enough, and less significant articles were presented with excessive detail. After a simple procedure (excessive detailing of non-essential items was reduced), the management report fit on one page without any problems, and it became much easier to use in practice.

Sometimes management reporting is made “large” because, just in case, the maximum possible detail is included in it. For example, such a management report item as “Revenue from sales” in the sales report can be printed with detail to groups, or with detail to a specific position.

It is clear that in the second case the management report can turn out to be much more cumbersome. By the way, to avoid such problems with visualizing management reporting, it can be viewed electronically using a software product that, if necessary, allows you to expand one or another hierarchical indicator.

So, if we return to the consideration of the qualitative characteristics of management reporting, then among the most important we can highlight the following:

understandability;

significance;

reliability (credibility);

comparability.

Clarity of management reporting

It should be noted right away that knowledge of the purposes for preparing a specific management report can significantly increase its understandability for the user. The goals of preparing management reports should be determined when developing a classifier of management reporting.

So, it is obvious that management reporting should be understandable to users, but there is one important caveat. In order to understand management reporting, users must have certain knowledge. In particular, you need to know at least the basics of economics and finance.

Of course, company managers are not required to know in detail the methodology for generating management reporting, but they must understand the meaning of each indicator of the management report they use. This knowledge includes, among other things, knowledge of management accounting policies, since the values ​​of most management reporting indicators directly depend on it.

Therefore, as part of a project to establish and automate management accounting, training should be planned, including for company managers. By the way, the lack of training in such projects has a very negative impact on the final results, but, nevertheless, very little attention is paid to this issue.

Thus, the information contained in management reporting should be understandable to users familiar with the principles of management accounting and the basics of economics and finance.

The importance of management reporting

In addition to clarity, management reports should have another important property - contain meaningful information. It would seem obvious that management reporting is prepared for decision making, and not just for the sake of being. But nevertheless, quite often management reports are overloaded with completely unnecessary data.

Again, one of the reasons for such information overload in management reporting is the lack of necessary preparation and planning for the management accounting project.

In particular, the classification of management reporting is not thought out in advance, the goals of the reports are not determined, etc. As a result, it turns out that gradually almost all management reports are littered with completely unnecessary information. This means that it is unnecessary for this management report.

By the way, those who like to add additional information to management reports, so to speak, just in case, can take advantage of the opportunities software products, which allow not all indicators to be displayed on the screen. On the one hand, you can immediately provide in the settings all potentially interesting indicators for a particular report, but, on the other hand, when visualizing it, only highlight some of them.

It should be noted that the significance of a particular indicator in management reports may depend on the period for which it is compiled. For example, in one company engaged in road construction, the management staff required daily management reporting from its production units (DRSU - road repair construction sites) scattered throughout the region.

It is clear that remote objects require operational control. But, as it turned out when analyzing management reporting, among the indicators that were collected every day, no more than 30% were truly significant. Preparing all other indicators of daily reports was simply an ineffective use of the time of specialists working in DRSU.

So, the information contained in management reporting should be useful for decision making and help evaluate past, present and future events, confirm or correct past estimates.

Reliability (authenticity) of management reporting

The reliability of management reporting is also a completely logical characteristic, like the previous two. Although one of the differences between management accounting and accounting is that very scrupulous accuracy is not always required.

After all, sometimes it is much more important for a manager to receive a management report that is not absolutely accurate, but within the required time frame, than a report that is verified down to the last penny, but is late. This remark does not mean at all that accuracy does not matter at all for management accounting.

But the most important thing is that management reporting must reveal the real activities and state of affairs in the company and be free from significant errors.

There are certain conditions to ensure the reliability of management reporting:

truthfulness;

neutrality;

predominance of essence over legal form;

prudence (conservativeness).

Truthfulness of management reporting

Truthfulness means that management accounts must truthfully reflect the transactions and other events on which they are based. Lack of veracity may be due to difficulties in identifying events and assessing them.

This can happen, for example, when filling in analytics values ​​while entering data into the accounting database, especially in cases where it is impossible to determine the analytics based on primary documents.

Or it may turn out that the original of the primary document did not arrive on time, and the “internal” primary document contained errors.

Neutrality of management reporting

Neutrality implies that the information contained in management reporting should be unbiased and should not influence decision-making in order to achieve the planned result. This can happen quite often in cases where managers rely too much on their intuition.

That is, they already have a ready-made solution in their heads, and with the help of a management report they only want to confirm its correctness. In such cases, the management report may be “tailored” to a ready-made result. Naturally, we are not talking about any deliberate distortion of data here.

“Adjustment” may consist, for example, in excluding from the management report indicators that clearly show the disadvantages of a prepared or already implemented solution. Another way to “adjust” may be to use a different accounting policy when calculating certain indicators.

After all, the same indicators can have different meanings when using different principles for recognizing and evaluating business transactions. True, this method of “adjustment” can be successfully applied, mainly, when developing planned management reporting (budgets), because actual reports can only be obtained on the basis of information already entered, which means that it is quite difficult to change management accounting policies.

True, management accounting policies can initially be chosen in such a way that, when used, the indicators that interest the company’s owners would look more attractive.

The predominance of essence over the legal form of management reports

The predominance of essence over legal form is also a completely logical condition for ensuring the reliability of management reporting.

Events must be presented in accordance with their economic substance and economic reality, and not only with their legal form, which do not always correspond to each other.

It's obvious that this condition has a direct bearing on management accounting policies, or more precisely, on possible differences between management accounting policies and accounting policies.

Prudence (conservativeness) of management reporting

Prudence or conservatism in management reporting means that in the face of uncertainty, care must be taken in making judgments so that assets are not overstated and liabilities are understated.

Where uncertainty is high, events should be disclosed only in notes to the reports. In other words, management reporting should not be “embellished” so that it is more pleasing to the management and/or owners of the company.

Comparability of management reporting

This characteristic of management reporting, such as comparability, is no less important than the previous three discussed above. It is clear that if the formats of management reporting change too often, it will be very difficult to control and analyze the dynamics of the indicators of such reports.

Of course, it is not always possible to develop the required form of management report the first time. To finally make sure that the form is complete, as a rule, it is necessary to draw up a management report several times in order to test it with numbers.

In this case, adjustments to the formats of management reporting are possible, but in the future it is advisable not to make changes to the forms of management reports unless necessary. Such a need may be due to a change in the company's strategy, which may require planning and monitoring of new indicators that were not previously included in management reporting.

Yes, in this case, the formats of management reports can be changed, but still, the company usually does not change its strategy very often, so the forms of management reports should not change often.

The number and composition of management reporting may change for another reason. If the company has a budget management system, and the planning model for certain reasons was detailed, which led to the emergence of new budgets and new indicators, then, naturally, it will be necessary to increase the number and composition of actual management reporting so that it is possible to obtain plan-factual reports for subsequent analysis.

Such actions, of course, may lead to changes in the existing formats of actual management reporting.

Classification of management reporting indicators according to the “time” parameter

All management reporting indicators for the “time” parameter can be divided into three groups:

interval (revolving);

instant (balance);

mixed.

Interval or turnover indicators management reporting provide information for a certain period of time (day, week, month, quarter, year, etc.). Such indicators may include, for example, sales volume, sales revenue, profit, financial flow, etc.

Instantaneous or balance indicators of management reporting provide information at a specific point in time. Such indicators may be, for example, cash balance, accounts receivable/payable, inventory, etc.

Mixed indicators are formed from interval and instantaneous ones. Examples of such indicators may be asset turnover (all or some elements: accounts receivable, inventory, etc.), return on assets, return on equity, etc.

It is necessary to pay attention to the fact that for the analysis of management reporting it is better not to use instantaneous indicators in their pure form, because they can vary greatly in each period. It is better to rely on interval or mixed (interval and instantaneous) indicators.

For example, if a company’s accounts receivable or inventory increases, then based on this information it is impossible to draw an unambiguous conclusion. If the turnover period of receivables or inventories increases, then this is clearly a negative trend, but the growth of receivables or inventory in itself says little.

Classification of management reporting according to the time characteristics of indicators

All management reporting on the time characteristics of indicators can be divided into three main groups:

factual management reporting;

planned management reporting;

plan-actual management reporting.

From the name of these groups of reports it is obvious what information they contain. But still it is necessary to make a few comments.

When preparing actual and planned management reporting, the same management accounting policies of the company must be used. Otherwise, it will complicate the analysis of plan-factual management reporting.

After all, some plan-actual deviations can arise only due to differences in the accounting policies that were used during planning and accounting.

When generating plan-fact management reporting for financial responsibility centers (FRCs), you need to remember that in this case it is necessary to use the principles of flexible budgeting.

Thus, when forming plan-actual budgets of the Central Federal District, it is first necessary to calculate a flexible plan, and then calculate plan-actual deviations. If this is not done, then the assessment of the results of the work of the Central Federal District in the reporting period will be incorrect.

Classifier of management reporting (by type of report)

Before you start developing management reporting formats, you must first create a report classifier, that is, a complete list of all necessary reports with brief description their content.

Of course, management reports can be classified in different ways. In fact, it is not so important which specific classification will be used in each specific company. The main thing is that it is carried out and clearly recorded in the relevant regulatory documents.

As a rule, the classification of management reporting is contained in the Regulations on Management Accounting. Naturally, the classification of management reporting should be convenient for use in practice.

An example of a possible classification of management reports is presented at Figure 1. It should be noted right away that the names of report groups are not generally accepted. Each company, in general, can use its own classification of reports.

Fig.1. Classification of management reporting

Although certain standards have already been established regarding financial reporting. That is, in every company, regardless of its areas of activity, organizational structure, business processes, etc. Three financial statements must be prepared: an income statement, a cash flow statement and a balance sheet (see. Rice. 1).

This is necessary in order to control the financial and economic condition of the company. Typically, the primary users of financial statements are the owners and CEO of the company. It should be noted that the participation of the general director in the development of management reporting formats, at least financial reports, is a necessary condition for the success of the management accounting project.

This does not mean at all that the general director himself must develop formats, but he must consider the draft forms of management reporting proposed by the working group of the project on setting up management accounting and, naturally, must delve into the essence of these reports.

In fact, one of the reasons for the general director's indifference in such projects may be his habit of managing not by the system, but by his eyes. The financial director of one company, at the very beginning of a consulting project on setting up management accounting, complained to our team of consultants about the general director.

He said that if you tell the CEO that he must understand three financial statements, then, most likely, nothing will come of this venture. The financial director explained that he had been making similar attempts for several years, so to speak, to accustom the general director to the use of management reporting in managing the company, but for him even one report is a lot.

It really took us quite a long time to convince the CEO that it was simply impossible to achieve control over the financial and economic state, especially in rapidly growing companies, in any other way. Therefore, he and I conducted individual lessons, first to study financial statements, and then operational ones.

By the way, financial statements are so called because they contain only cost indicators. Financial statements, of course, can also contain relative indicators (for example, return on sales or return on assets), but these indicators are derived from cost indicators.

That is, in financial reports there are no indicators that are measured, for example, in pieces, kilograms, kilometers, etc. All financial statement items are measured in money. But in operational reports, in addition to cost indicators, there may also be natural indicators.

Objects of management accounting

Operational reports can actually consist of several groups (see. Rice. 1). In order to more easily understand the example of classification of management reports under consideration, you need to combine the classifier of management reporting with the classifier of accounting objects (see. Rice. 2).

Fig.2. Relationship between the classifier of management reports and management accounting objects

Financial statements are prepared for an entity such as a company as a whole or for a group of companies, if we're talking about about the holding. By the way, drawing up consolidated financial statements for a holding company can be quite a complex task.

If the holding consists of companies that are not connected with each other at the operational level, then the task of consolidating financial statements is solved quite simply. If business transactions are carried out between the companies of the holding, then in this case not everything is so obvious, because it will be necessary to take into account mutual transactions so as not to distort the data on income and expenses, assets and liabilities at the holding level in the consolidated statements.

So, financial statements provide information about the financial and economic condition of the company as a whole. But in order to understand why exactly the values ​​of the financial statements indicators were obtained, it is necessary to dive into a lower (operational) level. Lower level management reports can be different types depending on the accounting objects.

Among the lower-level accounting objects, business processes, projects and divisions can be distinguished. Moreover, projects can be divided into current and investment. The fact is that the current activities from which the company earns profit can be organized in different ways.

Some companies (process companies) make money by organizing a chain of regular business processes from procurement to sales, while others (project companies) make money by building a system for performing time-limited actions (projects). Process companies may include, for example, organizations engaged in mass production, or trading companies engaged in regular wholesale or retail sales.

Typical representatives project companies are considered construction organizations, because they earn profit through the construction and sale of certain objects. The construction of such facilities in this case are ongoing projects. As a rule, all these objects are unique in their own way, so this type of activity cannot be considered as more or less typical as mass production.

In fact, recently there has been a growing tendency to blur the line between process and design organization current activities. For example, some manufacturing companies may operate on a job-to-order basis, which may be considered a project activity. And among construction companies there are those that regularly build more or less standard objects, for example, towers for cellular operators.

A company may have several hundred such more or less standard objects throughout the year. Nevertheless, the current activities of any company are more related to either process or project activities. This is the basis for the development of a classifier of management accounting objects and a classifier of management reporting.

Thus, a process company simply does not have such an object as current projects. But in addition to current projects, regardless of the organization of current activities, any company may have development projects. The goal of these projects is fundamentally different from the goals of current projects.

Current projects allow the company to earn profit from its existing potential, and development projects are intended to significantly change the company's potential, which in the future, naturally, should have a positive impact on the final financial and economic condition of the company.

So, to control the current activities of process companies, functional (process) management reports are used, which contain information on financial and economic indicators that characterize the effectiveness of the implementation of business processes. The number and composition of functional reports are determined individually in each company.

To monitor the current activities of project companies, management reports on current projects are used, which contain information on financial and economic indicators that characterize the effectiveness of the implementation of business projects.

To monitor effectiveness investment activities investment reports are used, which contain information on financial and economic indicators that characterize the effectiveness of the implementation of development projects.

And finally, to monitor the work of financial responsibility centers (FRC), reports on FRC are used, which contain information on financial and economic indicators that characterize the performance of those divisions that have been assigned the status of FRC.

Note: the topic of this article is discussed in more detail at the workshop "Organization and automation of management accounting", which is carried out by the author of this article -

It is within the capabilities of any company to build an effective and simple system for generating basic management reports in a relatively short period of time. After all, such reports are based on the information that, as a rule, each enterprise has.

As a business develops, management’s ability to control the main parameters of the company’s activities begins to play a fundamental role in its sustainability and the possibility of further development. The most clear and complete picture of the state of the enterprise is provided by management reports - on cash flows, profits and losses and the management balance sheet.

Download useful documents:

Initial information for generating management reports

The generation of basic management reports is based on the information that, as a rule, any company possesses.

Firstly, every enterprise has complete information about cash flows. This can be both accounting data (statements on ruble and foreign currency accounts, cash reports, settlements with accountable persons), and information that may not be in the accounting data, for example from the register of settlements between individual businesses within the holding, etc. Secondly, any enterprise in one form or another has in its arsenal reports that characterize the state and dynamics of the most important assets and liabilities. Thus, we can say with confidence that each enterprise keeps records of inventories, mutual settlements with buyers and suppliers of products, or other assets and liabilities that are significant for this type of business.

Often this information is contained in several software products, which is why the data in the reports received does not always correspond to each other. Despite this, the availability of this information is sufficient to begin generating basic management reports.

At the same time, in the process of forming the management balance, all inconsistencies in the reports will be automatically identified, and, accordingly, sources of costs that were previously simply ignored will be discovered.

The most convenient way to prepare management reports is in Excel. This software product has excellent means analysis and processing of data, including when it comes to large amounts of information. By the way, there is a convenient service for maintaining management accounting in the cloud and you will no longer need any reports in Excel. .

Personal experience
Sergey Dmitriev,

Management accounting implementation plan

Before generating a cash flow statement, it is necessary to carry out the following procedures, which will subsequently ensure that information is obtained in the required context and with the required degree of detail.

1. Analysis of the enterprise structure. If an enterprise conducts several independent areas of activity, then it is advisable to maintain management accounting for them separately. It is necessary to highlight for each direction those cash flow accounts that serve it. If you have accounts servicing several types of businesses at once, the easiest way is to create an intra-company cash settlement center (RCC) and include all such accounts in it. At the same time, to generate a cash flow statement for each type of business, you should use extracts from the cash flow center for transactions related to this area.

2. Analysis of the structure of a separate line of business. If necessary, you can highlight the divisions for which the company’s management would like to see a report. This detail plays important role when drawing up company cash flow budgets by division. If on initial stage If such an analytical section of information is not provided, then in the future there will be no mechanism for monitoring the execution of budgets by each of the divisions.

3. Formation of a plan for cash flow items. This is also an important step on which the visibility of the final report will depend. However, constructing an outline of articles is a fairly simple and standard procedure, so within the framework of this article it makes no sense to dwell on its description.

If all the preliminary steps described above have been completed, then the further generation of the cash flow statement is quite simple. technical work. In MS Excel you need to create the form of the required report. Then you need to import cash flow account statements from the appropriate programs and, having written the appropriate formulas, summarize the data for each cash flow item on the summary sheet of the turnover report. It is also quite simple and useful to make separate reports with breakdowns of each cash flow item in the context of elementary transactions. An example of such a report is given in table. 1.

Table 1 Explanation of Article 15. Rental of premises

date	Cash flow account	Income (rub.)	Expense (RUB)	Description		Article	Balance by item (RUB)
				Counterparty	Note	ODDS
							0,00
12.03.06	Calc. check		152 000,00	LLC "Warehouse services"	Rent for May	15.1.	152 000,00
14.03.06	Calc. check		359 700,00	LLC "Rent of Offices"	Rent for May	15.1.	511 700,00
15.03.06	Calc. check		87 705,53	OJSC "Mosenergo"		15.2.	599 405,53
18.03.06	Cash register		140 000,00	Private security company "Granit"		15.3.	739 405,53
18.03.06	Calc. check		359 700,00	LLC "Rent of Offices"	Rent for April	15.1.	1 099 105,53
21.03.06	Calc. check		221 670,73	OJSC "Heat Networks"	Heat energy for March	15.2.	1 320 776,26
28.03.06	RCC		12 000,00	LLC "Equipment Rental"		15.1.	1 332 776,26
TOTAL:		0,00	1 332 776,26				1 332 776,26
			Summary of sub-items
			15.1.	Rental of premises	883 400,00
			15.2.	Communal payments	309 376,26
			15.3.	Security	140 000,00
			TOTAL:		1 332 776,26

These simple procedures that can be implemented in very little time short period time (from one week to a month, depending on the structure of the enterprise), allow you to establish complete control over the receipt and expenditure of funds. In addition, the generation of a cash flow report allows you to begin creating a cash flow budget in the context of selected divisions and items, as well as monitor the execution of these budgets, which significantly increases financial discipline in the enterprise.

Personal experience
Nikolay Sinitsyn,

At the initial stage of creating a company, it was necessary to quickly organize management accounting and generate basic management reports in order to ensure the management company’s control over the commercial and financial activities of regional divisions. Initially, it was decided to develop and implement a unified automated enterprise management system, including management, accounting and tax accounting based on 1C.

However, it was clear that developing the program would take considerable time. In this regard, at the first stage of the company’s development, management accounting in regional trade and production divisions was carried out according to the methodology described by the author in this article. This allowed the management company, during the development of an automated accounting system, to work with regional divisions on planning, accounting and control of their activities and, in the process, refine the principles and reporting algorithms to be automated.

Management balance sheet and profit and loss account

Let us immediately note that the formation of these two management reports is a single inseparable process. It is almost impossible to draw up a correct profit and loss account if you do not prepare a management balance sheet in parallel with it.

Reporting will require a cash flow statement and statements describing changes in the company's main assets and liabilities. Based on the data taken from these reports, the main entries will be made to form the income statement and changes in the management balance sheet.

Before starting to compile reports, it is necessary to analyze the structure of assets, liabilities, income and expenses of the enterprise and draw up a chart of accounts and items of income and expenses to construct a profit and loss statement.

For clarity, let’s look at the methodology for creating a management balance sheet and profit and loss statement using a specific example. Let’s assume that an enterprise is engaged in trade and purchasing activities, pays taxes to the budget and salaries to employees. All other aspects of the enterprise's activities in this example we will not consider them, since they do not in any way affect the reporting methodology.

For such an enterprise, a simplified chart of accounts of the management balance sheet and a chart of items in the profit and loss statement can be presented in the form of a table. 2 and table. 3.

table 2. Account structure

Table 3 Structure of income statement items

It should be noted that, at its core, the profit and loss statement is a transcript of changes in the balance sheet item “Profit” for the reporting period. It is for this reason that generating a profit and loss statement without drawing up a balance sheet usually leads to incorrect results.

The inclusion of a auxiliary account (04) in the chart of accounts of the management balance sheet is associated with the need to highlight all discrepancies between the data of various reports for their further analysis and elimination (or write-off to the financial result of the reporting period).

Now let’s look at the management reports we need for our work and compare each of the values ​​in the reports with a certain posting on the balance sheet accounts, and if the posting concerns the “Profit” account, then also the posting on the items of the profit and loss statement (Table 4, table 5, table 6, table 7).

Table 4. Cash flow statement

Article title	Sum	Example in numbers	Wiring
Balance at the beginning of period	Coincides with item 01 of the balance sheet at the beginning of the period	35	–
Sales proceeds	A'	1000	No. 1 Dt 01. Kt 04.
Payment to suppliers	B'	800	No. 2 Dt 04. Kt 01.
Wage	C'	105	No. 3 Dt 06. Kt 01.
Taxes	D'	110	No. 4 Dt 07. Kt 01.
Balance at the end of the period	Coincides with item 01 of the balance sheet at the end of the period	20	–

Table 5 Report on settlements with customers

In this and subsequent examples, when making entries on account 08. “Profit”, we will indicate the income statement item as an additional analytics, which will allow us to correctly generate this report.

Please note that A' in the statement of cash flows and A'' in the accounts receivable statement represent the same parameter. However, it is not always possible to achieve complete coincidence of these values ​​in practice. In this example, A’ and A’’ are equal to 1000 and 1002, respectively. Such a discrepancy may be due to various reasons - the presence human factor, generation of reports in different currencies without correct accounting of exchange rate differences, etc.

Postings associated with these amounts are made in transit through auxiliary account 04. At the same time, the difference between A’ and A’’ remains for now in account 04. The same should be done with all similar parameters that are present in the two reports. In this example, this applies to parameters A, B and F.

Table 6. Goods movement report

Table 7. Accounts payable report

After the entries have been made in accordance with the data obtained from the management reports discussed above, we receive a partially completed management balance sheet. At the same time, balance sheet items 01, 02, 03 and 05 are finalized, since the balance on these accounts was calculated on the basis of available reports. Articles 06 and 07 (and, accordingly, 08) require additional entries related to the accrual of costs wages and taxes. This is easy to implement by making the following transactions indicated in table. 8.

Table 8. Additional transactions on balance sheet items that do not have specialized reports

Now all that remains is to deal with the balances on account 04, which is the sum of deviations between similar data in various reports. If such deviations are significant and the reason for their occurrence is not obvious, you should analyze the report data, identify the source of the discrepancies and, if necessary, make adjustments to eliminate the cause of their occurrence. If the amount of these deviations is insignificant or their cause is known, then account 04 should be reset by assigning these amounts to the corresponding items of the profit and loss statement.

Let’s say that the deviations A’ from A’’ and B’ from B’’ in the example we are considering are associated with exchange rate differences (the reports were generated in different currencies). The deviation of F' from F'' is due to the fact that the goods movement report does not take into account the arrival of any insignificant part of the assortment (for example, packaging material). In this case, you can reset the auxiliary account 04 with the transactions indicated in the table. 9.

Table 9 Additional Sub-Balance Account Transactions

Thus, we were able to build a system of entries that form the profit and loss statement and changes in the management balance sheet for the reporting period. In this case, data taken from standard reports generated at any enterprise were used. And, despite the fact that in reality the structure of the balance sheet, profit and loss statement and reporting forms that are used with this approach are more complex than in the example given, this technique can be easily applied in almost any enterprise.

Personal experience
Nikolay Sinitsyn, Head of Planning and Accounting Department of JSC " Trade company"Alco-Trade"

TO strengths I would attribute to such a methodology the possibility of fairly quickly organizing management accounting at an enterprise and independence from the accounting software products used. The disadvantages are that this mechanism is more focused on the financial part of management reporting.

In practice, for operational management The enterprise also requires other important information necessary for in-depth analysis, control and management of sales, warehouse balances, mutual settlements with customers, etc. In other words, the express management accounting described by the author does not penetrate deeply enough into the business processes of enterprises. If such problems are solved within the framework of existing accounting systems, then the use of the described reporting methodology as a temporary measure is quite justified.

In addition, the disadvantages of this approach include the fact that employees of company branches in which management accounting is being implemented face additional labor costs - they have to keep records for themselves and records for the parent company, which, naturally, remains secondary for them. This often leads to discrepancies between accounting data and the actual situation at the enterprise.

Sergey Dmitriev, Financial Director of Aludeko-K LLC (Kostroma)

Opportunity in as soon as possible creating a visual enterprise financial management system without spending significant resources and without making significant changes to existing accounting programs is certainly strong point the technique under consideration. As for the disadvantages, in practice one has to face certain difficulties when analyzing discrepancies in the data of various reports. Naturally, the scale of this problem greatly depends on the quality of primary documentation at the enterprise.

In table 10 shows an example of calculating changes in the accounts of the management balance sheet and items of the profit and loss statement in accordance with the entries made above.

Table 10. Calculation of changes in management balance sheet accounts and profit and loss statement items for the reporting period

Wiring number	1	2	3	4	5	6	7	8	9	10	11	12	13	14	15	Total
Assets
01. Cash	1000	–800	–105	–110												–15
02. Settlements with customers					1300	–1002										298
03. Products							950	–968								–18
04. Sub account	–1000	800				1002	–950		947	–804			–2	4	3	0
Liabilities
05. Settlements with suppliers									947	–804						143
06. Settlements with personnel			–105								127					22
07. Calculations with the budget				–110								118				8
08. Profit					1300			–968			–127	–118	–2	4	3	92
Income statement items
08.01. Sales revenue					1300											1300
08.02. Cost of products sold								968								968
08.03. Wage											127					127
08.04. Taxes												118				118
08.05. Exchange differences													2	–4	–3	–5

Practice opinion
Irina Karavaeva, head of department financial control and analysis of JSC "Russian Electronics"

In my opinion, the main goal of organizing management accounting at enterprises is to provide managers with transparent and timely information for making management decisions. This allows you to solve the main accounting problems:
- lack of operational reporting (quarterly reporting is required by law);
- lack of transparency in information (methodologically it is recommended to distinguish only 5 groups of costs).

Thus, when forming a management balance sheet and profit and loss statement, the emphasis is on the introduction of additional accounting for items of expenses and income that are vital for the management of the enterprise, areas of activity, that is, ensuring the principle of reporting transparency.

It should also be noted that, in accordance with the legislation of the Russian Federation, all enterprises are required to maintain accounting records and prepare financial statements (the exception is enterprises that have switched to a simplified taxation system, but even in this case, they have simplified financial statements). Therefore, on the one hand, we can agree with the author in that all enterprises initially have all the necessary reports on financial and economic activities for organizing management accounting and reporting, but, on the other hand, the proposed algorithm does not take into account the fact that the implemented forms already available at the enterprise.

If we regard the article as an algorithm for setting up management accounting for enterprises with a simplified taxation scheme, which are exempt from the preparation of a cash flow statement and balance sheet (except for a report on fixed assets and intangible assets), then, in my opinion, the proposed methodology contains the following inaccuracies:

1. Generating a cash flow report. The algorithm does not cover the activities of auxiliary, support, and administrative departments; attention is also not focused on the formation of cash flow for the operational, investment and financial activities of the enterprise. In other words, the main purpose of introducing a cash flow statement is to build a management system cash flows enterprises and their optimization will not be achieved. Thus, the accumulation of flows in the main areas of activity, and then the detailing of these flows by divisions by cash flow items will not allow us to identify the net cash flow for all operating activities, as well as for investing and financing activities.
2. Formation of the management balance sheet and profit and loss account. The article presents an algorithm for forming balance sheet, while notional accounts and codification are used to describe the process. This, in my opinion, creates some confusion, since in accordance with the regulations there is an accounting plan that would be logical to use.

Managing any company is unthinkable without timely and accurate information about its condition. This information is the basis for making all financial decisions, including entering the global capital markets. But what to do if the data necessary for control like air does not arrive on time or, even worse, contradicts each other. What decision should the general director make if, in response to a request for sales volume for last month Do the sales department, finance department and accounting department provide “independent” data that differs by an order of magnitude? What to do in such a situation? Trust one of the divisions? Or calculate the average? Or maybe instruct subordinates to come to an agreement among themselves and “turn a blind eye” to discrepancies?

We will try to answer these questions based on accumulated experience and specific examples from the activities of domestic industrial enterprises.

WHERE DOES MANAGEMENT INFORMATION COME FROM?

One of the sources of management information is accounting. With such a statement, we may shock supporters of management accounting, who traditionally separate it from accounting, fiscal goals from management requirements, external users from internal ones, etc. But in reality, domestic accounting has historically carried a managerial burden. At some enterprises that have not lost the experience of the Soviet economy, information on costs by elements, items, places of origin is accumulated in accounting registers from year to year, the cost of production is formed by calculation groups, etc. At other enterprises that use the standard accounting method, up to 90% of costs and cost estimates are calculated one day after the release of a batch of products or the provision of services.

But this managerial orientation of accounting is the exception rather than the rule. Fiscal goals impose their own specifics on the procedure for reflecting business transactions: complex contractual schemes are built that minimize taxation within the framework established by law. In addition, the principle of prudence and the requirements for documenting business transactions in practice lead to the fact that accounting records appear several weeks or even months after the reporting period. So it is impossible to accept accounting as the main source of information for managers. Therefore, in departments of enterprises and companies, operational accounting of contracts and relationships with counterparties, movement of material assets, receipts and payments, etc. is organized spontaneously or under centralized leadership. Its peculiarity is its focus exclusively on management goals, as well as the use of undocumented sources of information, forecast estimates, etc.

What is obtained by combining accounting and operational accounting data is called management accounting. But simple aggregation cannot achieve comparability of data. Therefore, some enterprises rely more on accounting, while for the management of others, operational accounting is a priority. On average, the following picture emerges (see table).

Operational accounting serves as a provider of information:	Information comes from accounting:
About contracts with customers and relationships with them	On the sale of products (works, services)
On inventories of inventory items (raw materials, supplies, finished products)	About direct material and labor costs, overhead costs broken down by elements and items, by cost carriers, by places of origin, responsibility centers, etc.
About contracts with suppliers and contractors and relationships with them	On the cost of products (works, services)
On the flow of funds: receipts from customers, payments to suppliers, contractors, the budget, extra-budgetary funds, credit organizations, etc.	About the profit of the enterprise
	On the accrual and payment of taxes, fees and obligatory payments to the budget and extra-budgetary funds
	On accounts receivable and payable to external counterparties
	On the use of own (profit, depreciation) and borrowed sources and funds

But, no matter how priorities are set in management accounting, the following problems may arise when using it:

• those who use primarily accounting, - low efficiency, insufficient detail of factual information, etc.;
• for those who use primarily operational accounting, - unsatisfactory financial position when conducting a formal assessment of financial statements by external users (tender commissions, investors, etc.). It is paradoxical that such a conclusion can appear in conditions when the enterprise does not have financial problems.
• for those who use both accounting and operational data, - incomparability of management data obtained from various sources.

HOW TO ACHIEVE DATA COMPARABILITY?

The problem of comparability of accounting and operational data in management accounting is undoubtedly the main one. Ideally, an enterprise should create a unified information space for accounting information based on an ERP system.

All actual data is entered into this system once, after which it is reflected either only in accounting, or only in operational accounting, or simultaneously in these two types. Comparison of data from sales, procurement, financial departments, etc. with accounting data turns into an elementary automated procedure, performed at any frequency at the user’s request.

But what should an enterprise do that is not ready to shell out several tens or hundreds of thousands of dollars for an ERP system? For such enterprises, we recommend organizing regular reconciliations of accounting and operational data (the goal is not to equate accounting and operational data here). As a result of these reconciliations, managers will receive information about the reasons for accounting discrepancies, i.e. due to which, for example, the volume of sales provided by the accounting department differs from management data on sales from the sales department and from the volume of receipts from the financial department of the enterprise.

HOW TO REGULATE THE PROVISION OF INFORMATION

In order to achieve comparability of accounting and operational data, we propose to proceed as follows.

First, to “photograph” the current state of affairs (you need to find out how management information is now received, where it comes from (from accounting or operational accounting), where there is duplication of data).

Second, determine the source of factual information for each report that comes to management's desk:

• from accounting;
• from operational accounting;
• from operational accounting with subsequent adjustment of the indicator according to accounting data.

A difficult and at the same time important point is the readiness of the enterprise management to receive prompt, but not always accurate information.

Thirdly, determine the points of contact and the procedure for reconciling accounting and operational data.

At first glance it seems that best result will bring a complete reconciliation of operational and accounting records for the reporting period. But this is not so, because the labor costs for its implementation are usually quite high, and accountants and managers of other departments are distracted from their main work. Therefore, to analyze discrepancies, we propose to use factor analysis with subsequent comparison of its results with a previously established level of materiality. If the discrepancies are minor, then no additional work is necessary. Otherwise, you will still have to reconcile the data by position.

Let's take a closer look at the most important point- the procedure for reconciling accounting and operational data. Let's consider it using the example of a practical situation, analyzing the discrepancies between the data on the volume of oil sales for the month obtained from the accounting department and from the commercial (sales) division of the enterprise.

Example. An oil and gas producing enterprise sells oil on the foreign market using the services of an affiliated trader located in offshore zone. The trader, in turn, sells oil to buyers at market prices. The sales department works directly with the end buyer of petroleum products, and receives daily information on sales of oil shipments from the trader’s office in electronic form. Documented information (acts of transfer of oil to an offshore trader) is sent to the accounting department by mail, where it serves as the basis for accounting records.

In the first days of the month following the reporting month, departments prepare reports for the general director. The sales department report is generated in market prices and in dollars. Accounting prepares reports in accordance with accounting rules.

In conclusion, it should be noted that the approach we propose is not a panacea in the fight against the heterogeneity and incomparability of management information. Its use is limited to the following points:

• the objective complexity of the business process and its documentation in accounting. The considered example, although it takes into account a number of factors - discrepancies in sales volumes, prices and exchange rate differences, at the same time does not reflect the full complexity of civil law relations that arise in holdings with their offshore companies, service companies, etc. As the business process becomes more complex, labor costs for accounting and, accordingly, the likelihood of errors increase several times.
• economic efficiency of reconciliations. This universal market criterion allows you to objectively compare the costs of manual labor for monthly data reconciliation with the costs of implementing an ERP system and, in some cases, formulate a reasonable question: “Or maybe it’s ERP after all?”

Nevertheless, the proposed method has the right to life. With its help, the management of the enterprise will receive acceptable, in terms of timeliness and accuracy, management information. But when its provision is established, enterprise management is faced with questions of forecasting and analysis: “What to compare with? Amount net assets 120 million rub. - Is this good or bad? Where were we supposed to be and where did we end up? How much will management profit decrease if a ban on oil trading through offshore traders is introduced?”

The main purpose of the formation of management reporting is to satisfy the information needs of management within the company by providing indicators in physical and monetary form, thanks to which it is possible to evaluate, control, plan and predict the activities of its divisions.

The preparation of such reports is carried out on a voluntary basis. It does not need to be sent to control authorities.

Management reporting - what it includes

In the structure of management reporting relating to the positions of general. director and his deputies, the following information may be recorded:

• Cost of manufactured products;
• Characteristics of the unfinished product manufacturing process;
• Volumes of production of goods sent to the warehouse;
• Volumes of materials and semi-finished products that are used in the manufacture of goods.

Generation of management reporting

Management reporting is generated in the following order:

1. Clarification from the gene. director, as well as his deputies, what information he needs to submit and with what frequency.
2. Ask the company's accountant for basic details.
3. Preparation of documentation that will reflect the main performance indicators. The employee responsible for reporting can generate such documentation separately for each governing body.
4. Direct reporting.

Preparation of management reporting

The following requirements apply to the preparation of management reporting:

• The information contained in the report must be fully consistent with the purpose for which the report is being prepared;
• The report should not contain biased opinions and subjective assessments;
• The report must be compared with the plans;
• The report should not contain unnecessary information - the smaller it is, the easier it is to understand its content.

Management reporting - example

Here is an example of the structure of management reporting:

Composition of reporting	Main users of reporting
Report on the financial results of the company (master reports)
Cash flow report	Company management and Budget Committee
Report on profits and losses incurred
Forecast (managerial) balance
Management reports on financial results of the company
Analysis of the composition, structure and changes in the company’s income and costs, as well as assessing their relationship	Company management and shareholders
Analysis of changes in profit indicators
Cost-benefit analysis
Reporting on the execution of operational budgets for various purposes
Accounts Receivable Report	Manager of the sales department, accounting department and financial department
Accounts payable report	Manager of the Purchasing Department, Finance Department and Accounting Department
Materials procurement report	Managers of the production and supply departments
Report on sales of manufactured products	Sales Department Manager
Report on available stocks of materials and finished goods	Managers of the sales department and supply department, head. warehouse
Report on existing work in progress	Chief engineer, production and sales department managers

COURSE WORK

by SUBJECT

"Management Accounting"

"INTERNAL MANAGEMENT REPORTING"

Introduction

1.1 Concept and types of reporting

1.3 Users of management reporting and reporting periods

Chapter 2. Use of management reporting using the example of Cherek LLC

2.1 Feedback in the operational management system

2.2 Internal reporting forms

2.3 Analytical calculations

Conclusion

Reporting is the final stage of the accounting process, therefore it consists of generalized final indicators that are obtained at the end of the reporting period using appropriate processing of current accounting data. Reporting may contain both quantitative and qualitative indicators, both in monetary and physical terms. Thus, reporting is a source of information for analysis and decision-making.

Purpose course work is the study of management reporting.

The objectives of this course work are:

studying the purposes of creating management reporting;

studying types of management reporting;

studying the requirements for management reporting;

analysis of management information.

The subject of the study is the management reporting of the organization.

Methodological and methodological basis writing coursework are federal laws RF, regulations on accounting(PBU), educational and reference literature.

Chapter 1. Internal management reporting

1.1 Concept and types of reporting

Reporting used in practice can be divided into several types according to three main characteristics:

1) the amount of information presented in the report;

2) purpose of compilation;

3) reporting period.

Based on the volume of information, a distinction is made between private and general reporting. Private reporting contains information about the results of activities of any structural unit of the enterprise or about individual areas of its activities, or about the results of activities in specific geographic regions (branches). General reporting characterizes the results of the enterprise's activities as a whole.

Depending on the purposes of preparation, swelling can be external or internal. External reporting serves as a means of informing users interested in the nature of the activity, profitability and property status of the enterprise. The preparation of internal reporting is caused by the need for intra-company management.

Depending on the period covered by the reporting, a distinction is made between periodic and annual reporting. Periodic reporting is reporting compiled at certain intervals (day, week, decade, month, quarter, six months). Annual reporting is prepared within the time limits regulated by the current regulations RF.

Management reporting - internal reporting, i.e. reporting on the conditions and results of the activities of the structural divisions of the enterprise, individual areas of its activities, as well as the results of activities by region.

The purpose of drawing up management reporting is to satisfy the information needs of intra-company management by providing cost and natural indicators that make it possible to evaluate and control, predict and plan the activities of the structural divisions of the enterprise (individual areas of its activity), as well as specific managers.

The purpose of compiling internal reporting determines its frequency and forms, as well as a set of indicators. The accuracy and volume of the data provided depend on the organizational, technological and economic features inherent in the enterprise and the specific management accounting object, and the management goals in relation to this accounting object. In this regard, the development of internal reporting is main task enterprises. The content, forms, deadlines and obligations for submitting these reports, as well as users, depend on the business conditions of a particular enterprise.

1.2 Management reporting system

The management reporting system is one of the most complex and important elements management accounting, which allows the management of the enterprise, on the one hand, to understand the limits of their capabilities in obtaining the necessary information from performers, as well as the capabilities of information and technical services, and on the other hand, to receive this information properly formatted, i.e. in the form in which they are convenient to use for making management decisions.

In addition, the management reporting system is the result of the activity of any management accounting system or, in other words, the product of its activity, the purpose for which it is created at the enterprise.

When creating a management reporting system, the following is required:

determine the form, deadline for submitting the report and the person responsible for its preparation;

draw up a scheme for generating management reports, identify the owners of the source information;

give the responsible person the powers of a coordinator, i.e. administratively allow him to obtain information from its owners;

determine the users of the information and the form in which it will be provided to them.

To successfully conduct a project, you need to perform a number of actions.

Step 1: Form a project management committee

The tasks of such a committee are:

1) make decisions on approval of the above standards;

2) make operational decisions in the process of work;

3) evaluate the activities of groups on the ground and, if necessary, draw conclusions.

The process of implementing a management reporting system involves the emergence of numerous situations when it is necessary to make decisions, for example, on the standardization of procedures and reference books, project financing, which requires the presence of a rapid response team vested with the maximum possible powers. In principle, a process analysis can be carried out by one person, but the high criticality of the decisions made and their deep relationship with the company’s most important business processes require informed decisions to be made with the participation of the maximum number of representatives of stakeholders.

Stage 2. Form a working (project) group at the central office and in the field (or branches, if any)

In the process of creating a management reporting system, such a group solves the following tasks:

1) implement the system;

2) administer the system and applications;

3) configure options for a specific branch (if one exists);

4) manage and control the process as a whole;

5) prepare issues for approval by the management committee;

6) carry out direct contacts with the supplier.

If the company has a complex structure, it is necessary to have additional personnel to ensure the development and maintenance of the enterprise’s accounting and management standards, possibly as part of economic divisions (accounting, planning department) or as an independent division.

Stage 3. Form corporate standards

The following standards are being formed:

1) financial accounting (chart of accounts, accounting policies, analytical accounting codes);

2) material accounting (directory - codifier of materials, standards for accounting for commodity flows, financial documents, accounting registers, accompanying documents, principles of inventory management in the context of materials);

3) production accounting (principles of cost calculation, principles of cost allocation, principles of accounting for auxiliary and by-products).

The above list of corporate standards is approximate and largely depends on the type of activity of the company and its current state(size, presence or absence of branches, etc.).

The level of detail of corporate standards depends on the degree of integration of the financial processes of the parent organization and its divisions.