Managment VS Statutory reporting

Are you a business owner who is too caught up with multiple aspects of running a business and would not want to be further troubled by the piles of invoices and reports?

Of course you’d need to review your sales reports and pipelines. Data and reports might just be the basis for your next step of decision making.

For growing your business and even selling it eventually.

They are imperative for making sound people, financial, and organization decisions and they serve as important tool to review your past decisions and making the insightful changes to steer a business forward.

Management report does not need to comply to local statutory requirements, unlike statutory accounts that you need to produce each year to meet the regulations. Management reports contain information that will help you improve your processes, review performances, products or services, and ultimately for you to make decisions that will help drive your future profitability.

Statutory financial reports mainly is produced from past actual data, past performance and are normally required to submit to local authority on an annual basis. Management reports are useful in their forward looking nature, can make use of past data but can be crafted to your needs to be forward looking, along with operational information to forecast the future performance of the business.

Business owners are the end “authority” for the Management reports and and they can allow you to see how various functions of the business are doing, allow you to analyze and improve the performance of different departments, KPIs, budget and forecasts vs actual spend etc. You can ask to produce it more frequently than financial reports. Although they are not mandatory, your business will benefit by producing and reviewing the reports so that you are in a strong position to identify the problem or issue before they become serious.

Statutory reports can be produced by external firm of accountants for your investors or compliance purpose, management reports are mostly produced by internal staff who are closer to the business and yourself to understand the operation and performance of your company.

As business owners, you can decide to invest more now in reviewing more regularly the financial performance of your company so that you don’t have to just adhere to compliance purpose.