Build an efficient and simple system formation of basic management reports in a relatively short period of time is within the power of any company. After all, such reports are based on the information that, as a rule, every enterprise has.

As the business develops, it is of fundamental importance for its sustainability and the ability to further development the ability of management to control the main parameters of the company's activities begins to play. The most clear and complete picture of the state of the enterprise is provided by management reports - cash flow, profit and loss and management balance sheet.

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Initial information for the formation of management reports

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

Firstly, each enterprise has complete information on cash flow. 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 and so on. 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. So, 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 essential for this type of business.

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

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

The most convenient way to make management reports is in Excel. This software product has excellent tools for analyzing and processing data, including when it comes to large amounts of information. By the way, there is a convenient service for 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 provide information in the required context and with the required level of detail.

1. Analysis of the structure of the enterprise. If an enterprise conducts several independent activities, then it is advisable to keep management accounting for them separately. It is necessary to allocate for each direction those cash flow accounts that serve it. If you have accounts that serve several types of business 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, extracts from the RCC for transactions related to this area should be used.

2. Analysis of the structure of a separate line of business. If necessary, you can select departments in the context of which the company's management would like to see the report. This detailing plays an important role in the preparation of budgets for the company's cash flow by department. 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 departments.

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

If all the preliminary steps described above are completed, then further generation of the cash flow statement is a fairly simple technical job. In MS Excel, you need to create the form of the required report. Then you need to import statements on cash flow accounts from the relevant programs and, having written the appropriate formulas, summarize the data for each of the cash flow items on the summary sheet of the turnover report. It is also quite simple and useful to make separate reports with a breakdown of each of the cash flow items in the context of elementary transactions. An example of such a report is given in Table. one.

Table 1 Explanation of article 15. Rent of premises

the date	Cash flow account	Arrival (rub.)	Consumption (rub.)	Description		Article	Balance by item (rub.)
				counterparty	Note	ODDS
							0,00
12.03.06	Calc. check		152 000,00	LLC "Warehouse Services"	May rent	15.1.	152 000,00
14.03.06	Calc. check		359 700,00	LLC "Office rent"	May rent	15.1.	511 700,00
15.03.06	Calc. check		87 705,53	JSC "Mosenergo"		15.2.	599 405,53
18.03.06	Cash register		140 000,00	CHOP "Granite"		15.3.	739 405,53
18.03.06	Calc. check		359 700,00	LLC "Office rent"	April rent	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	OOO "Equipment rental"		15.1.	1 332 776,26
TOTAL:		0,00	1 332 776,26				1 332 776,26
			Summary of sub-articles
			15.1.	Premises for rent	883 400,00
			15.2.	Communal payments	309 376,26
			15.3.	Security	140 000,00
			TOTAL:		1 332 776,26

These simple procedures, which can be implemented in a very short period of 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 formation of a cash flow statement allows you to start forming a cash flow budget in the context of selected departments and items, as well as control the execution of these budgets, which significantly increases financial discipline at the enterprise.

Personal experience
Nikolai Sinitsyn,

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

However, it was clear that the development of 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 to refine the principles and algorithms of reporting to be automated.

Management balance sheet and income statement

We note right away that the formation of these two management reports is a single inseparable process. It is practically impossible to draw up a correct profit and loss statement if a management balance sheet is not prepared in parallel with it.

To generate reports, you will need a cash flow statement and reports describing changes in the company's main assets and liabilities. Based on the data taken from these reports, the main entries will be made that form the income statement and changes in the management balance sheet.

Before proceeding with the preparation of reports, it is necessary to analyze the structure of assets, liabilities, income and expenses of the enterprise and draw up a plan of accounts and items of income and expenses to build a profit and loss statement.

For clarity, let's consider the methodology for the formation of a management balance sheet and a profit and loss statement using a specific example. Suppose that the company is engaged in trade and procurement activities, pays taxes to the budget and salaries to employees. All other aspects of the company's activities in this example we will not consider, since they do not affect the reporting methodology in any way.

For such an enterprise, a simplified chart of accounts of the management balance sheet and a plan of income statement items 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, in essence, the profit and loss statement is a breakdown of changes in the balance sheet item "Profit" for the reporting period. It is for this reason that the formation of a profit and loss statement without drawing up a balance sheet, as a rule, leads to incorrect results.

The inclusion of an auxiliary account (04) in the chart of accounts of the management balance sheet is due to the need to highlight all the 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 consider the management reports that we need for 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 the posting on the income statement items (Table 4, Table 5, Table 6, Table 7).

Table 4 Cash flow statement

Article title	Sum	An 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 Accounts payable report

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

Note that A' in the cash flow statement and A'' in the accounts receivable report 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 can be due to various reasons - the presence of a human factor, the generation of reports in different currencies without correct accounting for exchange rate differences, etc.

The entries related to these amounts are made in transit through auxiliary account 04. At the same time, the difference between A’ and A’’ remains for the time being 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 postings are made in accordance with the data obtained from the management reports discussed above, we get a partially finished management balance sheet. At the same time, balance sheet items 01, 02, 03 and 05 are finalized, since the balance of these accounts was calculated on the basis of the reports available. Items 06 and 07 (and, respectively, 08) require additional entries related to the accrual of costs for wages and taxes. This is easy to implement by making the following postings indicated in Table. eight.

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

Now it remains only 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 data of the reports, 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 reason is known, then account 04 should be reset to zero by attributing these amounts to the corresponding income statement items.

Suppose deviations A’ from A’’ and B’ from B’’ in our example are associated with exchange rate differences (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 postings indicated in Table. nine.

table 9, Additional operations on the auxiliary balance account

Thus, we managed to build a system of postings that generate a profit and loss statement and a change in the management balance sheet for the reporting period. At the same time, data taken from standard reports generated at any enterprise were used. And, despite the fact that in reality the structure of the balance sheet, income statement and reporting forms that are used in this approach is more complex than in the example given, this technique can be easily applied to almost any enterprise.

Personal experience
Nikolai Sinitsyn, head of the planning and accounting department of JSC " Trade company"Alco-Trade"

To strengths I would attribute such a methodology to the possibility of a fairly quick organization of management accounting in 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 the operational management of the enterprise, other important information is also required, which is necessary for in-depth analysis, control and management of sales, inventory balances, mutual settlements with customers, etc. In other words, the managerial express accounting described by the author does not penetrate deep enough into business processes at enterprises. If such tasks 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 the employees of the company's branches, in which management accounting is being introduced, have 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 Alyudeko-K LLC (Kostroma)

The ability to create a visual enterprise financial management system in the shortest possible time without spending tangible resources and without making significant changes to existing accounting programs is, of course, strong point the methodology under consideration. As for the shortcomings, in practice one has to face certain difficulties when analyzing discrepancies in the data of various reports. Naturally, the scale of this problem strongly depends on the quality of primary documentation at the enterprise.

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

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

Posting 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 buyers					1300	–1002										298
03. Goods							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. Settlements 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

Opinion practitioner
Irina Karavaeva, Head of the Department of Financial Control and Analysis of JSC "Russian Electronics"

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

Thus, in the formation of the management balance sheet and income statement, the emphasis is on the introduction of additional accounting for items of expenditure and income 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 keep accounting records and generate 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 in the company.

If we regard the article as an algorithm for setting up management accounting at enterprises with a simplified taxation scheme that are exempt from generating 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. Formation of the cash flow statement. The algorithm does not cover the activities of auxiliary, supporting, administrative divisions, nor does it focus on the formation of cash flow for the operating, investment and financial activities of the enterprise. In other words, the main goal of introducing a cash flow statement - building an enterprise cash flow management system and optimizing them - will not be achieved. Thus, the accumulation of flows in the main areas of activity, and then the detailing of these flows in the context of departments by cash flow items will not allow us to identify the net cash flow for all operating activities, as well as for investment and financial activities.
2. Formation of the management balance sheet and income statement. The article presents an algorithm for the formation of the balance sheet, while conditional accounts and codification are used to describe the process. This, in my opinion, introduces some confusion, since, in accordance with normative documents there is an accounting plan that would be logical to use.

Management reporting is one of the most important sources of obtaining information about the results of a company's activities, based on a combination of financial, sales, marketing, production and other indicators.

Information in management reporting should be economically interesting and actively used by managers, founders and business owners. The data disclosed in management reporting is necessary for the analysis of all activities. This helps to identify the causes in time. possible deviations from the parameters set by the business strategy, as well as show the reserves (financial, material, labor, etc.) that have not been used by the company so far. The process of setting and implementing management reporting can be divided into 7 stages.

Step 1. Diagnosis of the existing management system in the company.

This step is necessary for the analysis organizational structure company, the process modeling format is determined. If the company has business process schemes and their descriptions, these documents are analyzed and the main problem areas that require optimization are identified.

Diagnostic goals	Search systems approaches to increase the efficiency of management reporting
Classification and analysis of existing reporting forms	By the form of presentation - tabular, graphic, text; By business segments - purchase reports, sales reports, tax report; According to the targeting of the presentation - reports for management, reports for the leaders of the Central Federal District, reports for managers; By the amount of information - operational reports on current projects, investment reports, final financial reports, summary (master) reports; By content - comprehensive reports, analytical indicators, reports on key performance indicators KPI.
Improving the quality and reducing the time for obtaining the output analytical information necessary for making high-quality management decisions.	Analytical reports are of high value when they can be obtained in short time and contain information in a form that best meets the needs of the employee who makes decisions based on this report.
Increasing the reliability of stored information.	To make decisions, you need to rely only on reliable information. It is not always possible to understand how reliable the information presented in the reports is; accordingly, the risk of making poor-quality decisions increases. On the other hand, if an employee is not responsible for the accuracy of the entered information, then with a very high degree of probability he will not treat the information with due care.
Increasing the analytical value of information.	A non-systematic approach to entering and storing information leads to the fact that, despite the fact that large amounts of information have been entered into the database, it is almost impossible to present this information in the form of reports. Non-systematic here refers to the input of information by employees without developing general rules, which leads to a situation where, in terms of meaning, the same information is presented for different employees in a different form.
Exclusion of inconsistency and inconsistency of information	In the case of fuzzy certainty in the issue of division between employees of duties and rights to enter information, there is often multiple entry of the same information in different divisions of the company. Together with a non-systematic approach, the fact of duplication of information can even be impossible to determine. Such duplication leads to the impossibility of obtaining a complete report in the context of the information entered.
Increasing the predictability of obtaining a certain result	Decision-making is almost always based on an assessment of information from past periods. But it often happens that the necessary information was simply never entered. In most cases, the missing information would be easy to store if someone had assumed in advance that it would ever be needed.
Result	Based on diagnostics and decisions made, job descriptions are finalized, existing business processes are reengineered, reporting forms that do not carry information for data analysis are excluded, KPI indicators are introduced, accounting systems are adapted to obtain actual data, and the composition and timing of management reporting are fixed.

Step 2. Creation of a management reporting methodology

This stage is necessary for delegating authority in terms of drawing up operating budgets and determining responsibility, specific centers of financial responsibility (FRC) for the preparation of certain budget plans (segments of management reporting).

Goals and objectives to be solved as a result of the introduction of management reporting in the company:

• Establishing and achieving specific key performance indicators (KPIs);
• Identification of "weak" links in the organizational structure of the company;
• Improving the performance monitoring system;
• Ensuring transparency of cash flows;
• Strengthening payment discipline;
• Development of an employee motivation system;
• Rapid response to changes: market conditions, distribution channels, etc.;
• Identification of internal resources of the company;
• Risk assessment, etc.

The composition of management reports depends primarily on the nature of the company's activities. As practice shows, the composition of management reporting (master report) usually includes:

• Statement of cash flows (direct method);
• Statement of cash flows (indirect method);
• Profits and Losses Report;
• Forecast balance (management balance);

Consolidation of budgets

The formation of consolidated management reporting is a rather laborious process. Consolidated financial statements treat a group of related entities as a single entity. Assets, liabilities, income and expenses are combined into a common management reporting system. Such reporting characterizes the property and financial position of the entire group of companies as of the reporting date, as well as the financial results of its activities for the reporting period. If the holding company consists of companies that are not related to each other at the operational level, then the task of consolidating management reporting is solved quite simply. If business transactions are carried out between the companies of the holding, then in this case everything is not so obvious, because it will be necessary to exclude mutual transactions in order not to distort data on income and expenses, assets and liabilities at the holding level in the consolidated financial statements. In the budget policy of the company, it is necessary to fix the rules and principles for the elimination of VGO.

For this, it is more expedient to use specialized information systems, for example, "WA: Financier". The system makes it possible to eliminate intra-company turnovers at the level of primary documents and quickly obtain correct information, which simplifies and speeds up the process of generating management reporting, and minimizes errors associated with the human factor. At the same time, reconciliation of intragroup turnovers, their elimination, corrective entries and other operations are carried out automatically.

Example: Company A owns Company B 100%. Company A sold goods for the amount of 1500 rubles. The purchase of this product cost company A 1000 rubles. Company B paid for the delivered goods in full. At the end of the reporting period, company B did not sell the goods, and it is listed in its financial statements.

As a result of consolidation, it is necessary to eliminate the profit (500 rubles) that the company has not yet received and reduce the cost of inventory (500 rubles). To exclude GGO and profits that company B has not yet earned. You need to make adjustments.

The result of the consolidation of management reporting

Definition of key performance indicators (KPI - Key performance indicators)

The introduction of key benchmarks allows you to manage financial responsibility centers by setting limits, standard values or limiting limits of accepted indicators. The set of performance indicators for individual CFDs significantly depends on the role of this responsibility center in the management system and on the functions performed. The values ​​of the indicators are set taking into account the strategic plans of the company, the development of certain business areas. The scorecard can take a hierarchical structure, both for the company as a whole, and with detailing to each center of financial responsibility. After detailing the top-level KPIs and transferring them to the levels of the CFD and employees, they can be tied to staff remuneration, etc.

Control and analysis of the execution of management reporting.

For the execution of budgets included in management reporting, three areas of control can be distinguished:

• preliminary,
• current (operational)
• final.

The purpose of preliminary control is the prevention of potential violations of the budget, in other words, the prevention of unreasonable expenses. It is carried out before business transactions. The most common form of such control is the approval of requests (for example, for payment or shipment of goods from a warehouse).

The current control of budget execution implies regular monitoring of the activities of financial responsibility centers to identify deviations in the actual performance of their activities from the planned ones. It is carried out daily or weekly according to operational reporting.

The final control of budget execution is nothing more than an analysis of the implementation of plans after the closing of the period, an assessment of the financial and economic activities of the company as a whole and by management accounting objects.

In the process of budget execution, it is important to identify deviations at the earliest stages. Determine which methods of preliminary and current budget control can be used in the company. For example, introduce procedures for approving requests for payment or release of materials from a warehouse. This will help avoid unnecessary expenses, prevent budget overruns and take action in advance. Be sure to regulate the control procedures. Create a separate budget control regulation. Describe in it the types and stages of inspections, their frequency, the procedure for reviewing budgets, key indicators and their deviation ranges. This will make the control process transparent and understandable, and increase the performance discipline in the company.

STEP 3. Design and approval of the financial structure of the company.

This stage includes work on the formation of classifiers of budgets and budget items, the development of a set of operating budgets, planning items and their interconnections, the imposition of types of budgets on the organizational links of the company's management structure.

Based on the organizational structure of the company, a financial structure is developed. As part of this work, financial responsibility centers (CFRs) are formed from organizational units (divisions) and a model of the financial structure is built. the main task building the financial structure of the enterprise - to get an answer to the question of who and what budgets in the enterprise should be. A properly built financial structure of an enterprise allows you to see the “key points” at which profits will be formed, accounted for and, most likely, redistributed, as well as control over the company’s expenses and incomes.

Financial Responsibility Center (FRC) is an object of the company's financial structure, which is responsible for all financial results: revenue, profit (losses), costs. The ultimate goal of any CFD is profit maximization. For each CFD, all three main budgets are compiled: income and expenditure budget, cash flow budget and forecast balance (management balance). As a rule, individual organizations act as CFRs; subsidiaries of holdings; separate subdivisions, representative offices and branches of large companies; regionally or technologically separate activities (businesses) of diversified companies.

Financial Accounting Center (FAC) is an object of the company's financial structure, responsible only for some financial indicators, for example, for income and part of the costs. For the CFS, an income and expense budget or some private and functional budgets (labor budget, sales budget) are compiled. The main production workshops participating in single technological chains at enterprises with a sequential or continuous technological cycle can act as a DFS; production (assembly) shops; sales departments and divisions. Financial accounting centers may have a narrow focus:

• marginal profit center (profit center) – structural subdivision or a group of divisions whose activities are directly related to the implementation of one or more business projects of the company, ensuring the receipt and accounting of profit;
• income center - a structural unit or group of units whose activities are aimed at generating income and do not provide for profit accounting (for example, a sales service);
• investment center (venture center) - a structural subdivision or a group of subdivisions that are directly related to the organization of new business projects, the profit from which is expected in the future.
• cost center - an object of the financial structure of the enterprise, which is responsible only for expenses. And not for all expenses, but for the so-called regulated expenses, the spending and savings of which the management of the central heating center can control. These are divisions serving the main business processes. Only a few support budgets are prepared for the CZ. Auxiliary services of the enterprise (economic department, security service, administration) can act as a central lock. A cost center can also be referred to as a cost center (cost center).

STEP 4. Formation of the budget model.

There are no strict requirements for the development of a classifier for internal management reporting. Just as no two companies are exactly the same, so too are no two budget structures the same. Unlike formalized financial reporting: income statement or balance sheet, management reporting does not have a standardized form that must be strictly followed. The structure of internal management reporting depends on the specifics of the company, the budget policy adopted in the company, the wishes of the management regarding the level of detail of articles for analysis, etc. We can only give general recommendations on how to draw up the optimal structure of management reporting.

The structure of management reporting should correspond to the structure of the daily activities of the company.

Classification of articles on the example of the Statement of cash flows.

STEP 5. Approval of the budget policy and development of regulations.

The budget policy is formed in order to develop and consolidate the principles for the formation and consolidation of indicators for these items and methods for their assessment. This includes: the definition of a time period, planning procedures, budget formats, an action program for each of the participants in the process. After the development of the budget model, it is necessary to proceed to the regulation of the budget process.

It is necessary to determine which budgets, and in what sequence, are formed in the company. For each budget, it is necessary to allocate a person responsible for preparation (a specific employee, CFD) and a person responsible for budget execution (direction manager, head of the CFD), to set limits, normative values ​​or marginal boundaries for performance indicators of the CFD. It is imperative to form a budget committee - this is a body created for the purposes of managing the budget process, monitoring its implementation and making decisions.

Step 6. Audit of accounting systems.

At the stage of development and approval of the composition of the company's management reporting, it is also necessary to take into account that the classifier of budget items must be sufficiently detailed to provide you useful information about the income and expenses of the company. At the same time, you need to understand that the more levels of detail will be allocated, the more time and effort it will take to draw up budgets and reports, but the more detailed analytics you can get.

It is also necessary to take into account that as a result of the development of a management reporting methodology, it may be necessary to adapt accounting systems, because. in order to analyze the execution of budgets, planned indicators will have to be compared with the available factual information.

Step 7. Automation.

This stage includes work on the selection of a software product, the creation of technical specifications, the implementation and maintenance of the system.

09.03.2013

The article discusses the most common problems associated with the preparation of management reporting and ways to solve them. The optimal composition of management reporting is given so that it is not overloaded and at the same time gives users the information they need to make management decisions.

It is no secret that often a business owner is not satisfied with the composition and quality of the management reports he receives.

Either the reporting is prepared with a great delay, or its reliability is questionable, or the formats of management reporting are reworked over and over again.

It is common for a company to have no universal set management reporting forms.

The most common claims from the owner in this case are the following:

1. Reporting is not provided promptly: from the moment of the question to the receipt of an answer, it can take several hours, and in especially severe cases - days. It is clear that when the data is finally ready, it may become outdated. It will be problematic to make a competent managerial decision based on them; you will have to use intuition. The owner asks the following question, to answer which the financiers need a few more hours / days ... In this case, there is no need to talk about high business manageability.


2. Is questionable reliability of reporting. Often, the owner, having received information and starting to ask questions, cannot get a quick, competent answer from the financiers (see reason No. 1), or, having received transcripts, finds inaccuracies in them, and having found one thing, begins to doubt all the numbers. Or the owner is not clear about the process of reporting, and this leads to distrust of financiers. I don’t want to say that the owner must understand the reporting technology, but he must be sure that the financiers have all the mechanisms to obtain reliable reporting, and the task of the financial director, in case the owner has questions, plain language explain where the specific figure came from.


3. Report format is difficult to understand. Many owners complain that it is difficult for them to independently read and understand bulky tables, dotted with numbers, which are provided to them by financiers. Often the owner does not have a financial education, or due to individual characteristics it is difficult for him to read and understand the numbers, he perceives the information on the charts better.

All these reasons together can lead to a stalemate, when the owner bombards the financiers with more and more requests, and they prepare more and more new forms of management reporting to answer them.

Sometimes the owner asks to decipher the information provided, and in order to prepare such a decoding, the financier literally on his knee invents a new form in a short time.

And since the owner, as a rule, is not limited to one issue when studying management reporting, the number of such forms grows and multiplies in geometric progression. Is it necessary to say that every financier also has a current workload? The lack of an approved and understandable list of reporting forms, deadlines for their submission and responsible persons entails processing and increases the level of stress in the financial department.

The first thing to always remember: composition of management reporting should be sufficient, but not excessive.

The quality of management decisions does not depend on the number of prepared reports, but on how quickly they are prepared, how reliable the information in them is, how readable and understandable it is.

Thus,

• formation speed (timeliness)
• data validity
• ease of perception by the end user
• not overloading reporting with unnecessary forms

These, in my opinion, are the main criteria that management reporting should ideally satisfy in any business.

As part of management reporting, as has been said more than once (more details can be found in the article "Communication and differences between management accounting and accounting"), includes operating (or support) and final financial budgets.

Both operational and financial budgets should be formed both according to the plan and after the fact. At their core, operating budgets are deciphering the numbers of financial budgets. If their composition is sufficient, no additional transcripts to management reporting are required.

In general, the recipe for solving the above problems in management reporting is very simple. There he is:

1. Step 1: Determine the complete list of operating budgets.

For example, for a small retail chain, this list might look like this:

• Revenue plan
• Calculation of the planned cost
• Plan for rent and utilities in detail by retail outlets and management apparatus (rental of an office and a central distribution warehouse).
• Plan for commercial and administrative expenses of the management apparatus.
• Sales plan and payroll deductions
• Salary plan and deductions for employees of the administrative apparatus
• Tax plan: VAT, income tax, property tax, USN, UTII, etc.
• Depreciation Plan
• Plan for direct costs: in detail by outlets and management apparatus

The composition of operating budgets for a manufacturing enterprise will be somewhat more complicated and broader, I think the principle is clear.

BUT list of financial budgets for any business will always be like this:

• Income and Expenditure Budget (BDR)
• Cash flow budget (CDBS)
• Management balance
• Capital changes (as an additional form)

1. Step 2: For each operating budget, prescribe and approve the frequency of compilation (options: daily, monthly, quarterly), the timing of preparation and approval. Register and approve the responsible. All this is true both for the preparation of planned and actual budgets.
2. Step 3: For each financial budget, prescribe and approve the frequency of compilation (options: daily, for example, BDDS, monthly, quarterly), the timing of preparation and approval. Register and approve the responsible. All this is also true for the preparation of planned and actual budgets.

TIP 1:

I would recommend prescribing the terms for preparing and agreeing on planned budgets separately from the terms for preparing and agreeing on actual budgets. Because the planning process (budget period), in contrast to the preparation of actual budgets, firstly, is more extended in time, and, secondly, the mechanism for forming plans differs from the mechanism for collecting actual data.

TIP 2:

When setting the deadlines for the preparation and delivery of operating budgets (both planned and actual), you need to go "from the end", i.e. first determine the date by which you want to receive the final financial budgets. And then, starting from this date, “unwind” the chain of budgets back. Thus, the start date of the budget period will be calculated for planning.

With actual budgets, the situation is different: it is necessary to build on the dates of completion of operating budgets, because they depend on the deadlines by which it is possible to collect primary documents, and from them to go to the date of delivery of the actual financial budgets.

1. Step 4: develop unified formats for operating and financial budgets. Here the recommendation is simple: we must strive to ensure that the formats of operating and financial budgets are unified for all departments of the company. This is especially important to carry out and control for holding type companies that have several lines of business, as well as for companies with a developed branch network.

If this requirement is not met, then the data consolidation will take an enormous amount of time and lead to an increase in the number of errors.

That, in fact, is the whole algorithm for solving the most common problems associated with the preparation of management reporting.

You can say that it is easy to talk in theory, but in practice recommendations alone are not enough.

Yes and no. If you take the above algorithm to solve problems with management reporting and clearly think over and implement everything in accordance with it, I assure you, your most difficult problems with management reporting will go away. Another thing is that yes, you will have to work very hard on this yourself. It is not easy to think over the composition of budgets, their relationship and timing. But doable.

I wish you every success in this endeavor! You can send your questions to me by e-mail.

Management reporting is a document that reflects the main processes that were carried out by the enterprise. Moreover, each organization has the right to independently determine the specific constituent elements of such a document. Mainly, the reporting is oriented towards its users, and the content depends on their requirements and what interests them.

However, as in the preparation of any document in an enterprise, there are basic principles on which management reporting is based. First of all, it must meet the principle of simplicity. Do not overload the document with unnecessary and unnecessary information for a particular user, you should only include important indicators. In addition, its size should be clearly defined, for example, one A3. It will also help you choose the most interesting and informative facts. But the main thing: management reporting should obey the principle of efficiency, that is, its content should allow the user to take effective measures to improve the organization's activities. Simply put, the information provided must be timely.

Regular compilation of such a document will allow the manager to be confident in the effectiveness of the further functioning of the company, as the staff will act in accordance with the developed instructions. In addition, the specialist is obliged to complete all work on filling out the report within due date. At the same time, all information should be clear to the manager of the specific link for which it is intended. Properly executed and well-written management reporting fully reflects the activities of the enterprise and does not provoke additional questions.

Since the management personnel of the enterprise can determine the content of this document, the form of its provision is also chosen at its own discretion. Conventionally, there are three ways to display information: graphic, text and in the form of a table. As a rule, the specialist relies on the user. For example, for an accountant, a tabular report will be the most convenient and understandable, and all amendments and explanations can be provided in the form of a text note. While it is easier for an investor or an employee of an analytical department to assess the state of affairs with the help of graphs.

Separately, I would like to talk about the timing of reporting, as this factor determines its relevance, and, consequently, the timeliness of decisions. So, the division into short- and medium-term reporting is usually used, there is also periodic reporting. The latter involves the display of indicators that allow you to develop specific activities for the long term, that is, to determine the strategic goals of the company.

The document that most fully reflects the dynamism of the functioning of the enterprise is considered to be short-term management reporting. An example of it is in the form of daily and weekly collections of indicators, on the basis of which specific activities are developed for the next period. Middle managers are considered the main users at this level.

Mid-term management reporting is prepared on a monthly basis. It contains not only indicators for the past period, but also forecast values ​​for future activities. It is provided mainly to the management team, since it is they who can decide on the need to introduce some adjustments to such a document can provide significant assistance to the company and definitely has a positive effect on After all, managers and executives see what to expect from the future period while maintaining their previous positions.

Management of any company is unthinkable without timely and accurate information about its condition. This information is the basis for making all financial decisions, up to entering the world capital markets. But what to do if the data necessary for control like air do not arrive on time or, even worse, contradict each other. What decision should the CEO make if, when asked about the sales volume for the last month, the sales department, the finance department, and the accounting department submit “independent” data that differ by an order of magnitude? How to be in such a situation? Trust one of the divisions? Or calculate the average? Or maybe instruct subordinates to agree among themselves and "close their eyes" to discrepancies?

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

WHERE DOES THE MANAGEMENT INFORMATION COME FROM?

One of the sources of management information is accounting. With this statement, we may shock supporters of management accounting, who traditionally separate it from accounting, fiscal goals from management requirements, external users from internal, and so on. But in reality, domestic accounting historically bears a managerial burden. At some enterprises that have not lost the experience of the Soviet economy, information on costs by elements, articles, places of occurrence 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 the costs and cost estimate are calculated one day after the release of a batch of products or the provision of a service.

But this managerial orientation of accounting is the exception rather than the rule. Fiscal goals impose their own specifics on the procedure for recording 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 entries 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 the subdivisions of enterprises and companies, operational accounting of contracts and relationships with counterparties, the movement of material values, receipts and payments, etc. is organized spontaneously or under centralized management. Its peculiarity is the focus solely on management goals, as well as the use of undocumented sources of information, predictive estimates, etc.

What is obtained by combining the data of accounting and operational accounting is called management accounting. But a simple association does not achieve comparability of data. Therefore, some enterprises trust accounting more, 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 buyers and relationships with them	On the sale of products (works, services)
On stocks of inventory items (raw materials, materials, finished products)	About direct material and labor costs, overhead costs by elements and articles, by cost carriers, by places of occurrence, responsibility centers, etc.
On contracts with suppliers and contractors and relationships with them	On the cost of products (works, services)
On the movement of funds: receipts from buyers, 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 receivables and payables 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 detailing of factual information, etc.;
• those who use primarily operational accounting, - unsatisfactory financial position during the formal assessment of financial statements by external users (tender commissions, investors, etc.). Paradoxical is the fact that such a conclusion may appear in conditions where the enterprise has no financial problems.
• those who use both accounting and operational data, - incompatibility of management data obtained from different 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 single information space for accounting information based on an ERP system.

In this system, all actual data is entered once, after which they are 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 that is performed at any frequency at the request of the user.

But what about an enterprise 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 causes of discrepancies in accounting, i.e. due to which, for example, the volume of sales provided by the accounting department differs from the 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.

Firstly, to "take a picture" of the current state of affairs (it is necessary to find out how management information is now received, where it comes from (from accounting or operational accounting), where there is data duplication).

Second, determine the source of factual information for each report that comes to the management 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 willingness of the company's management to receive prompt, but not always accurate information.

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

At first glance, it seems that the best result will bring a continuous 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 needs to be done. Otherwise, you still have to reconcile the data by positions.

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

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

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

In conclusion, it should be noted that our proposed approach is not a panacea in the fight against heterogeneity and incompatibility 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 - the discrepancy in sales volumes, prices and exchange rate differences, at the same time does not reflect the complexity of civil law relations that arise in holding companies with their offshore companies, service companies, etc. With the complexity of the business process, the 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 reconciliation of data with the costs of implementing an ERP system and, in some cases, formulate a reasonable question: "Maybe 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 being established, the management of the enterprise faces questions of forecasting and analysis: "What to compare with? The amount of net assets of 120 million rubles is good or bad? Where were we supposed to be and where did we end up? How much will management profit decrease when the ban is introduced? to trade oil through offshore traders?