Management Information – what would you like to know?

Management information should be precisely that – information that is useful to help you manage your business. You will be familiar with the year-end accounts and possibly the monthly management reports coming from the standard accounts package. But these alone may not give you the information you require to manage and plan your business.Measuring money

In order to effectively manage the direction and profitability of your business these are some of the measures you could find useful:-

Profit & Loss account

Sales

  • How do your sales compare to expectations (forecast)
  • How do your sales compare to earlier periods
  • What are the sales values by product or service
  • What are the sales values by customer
  • What are the sales values by period
  • What are the  margins (gross profit) on all of the above
  • What are your most profitable products/services
  • Who are your most profitable customers

Costs

  • How does your expenditure compare to expectations (budget)
  • How does your expenditure compare to earlier periods
  • Which are your largest cost items
  • Who supplies these cost items
  • What are the payment terms of your suppliers
  • Why have you chosen these suppliers
  • What do the smaller expenditure items total and can these be decreased if significant

Staff costs

  • How do your staff costs relate to specific ‘cost centres’ or operating departments
  • How are your staff contributing to the business operations
  • What are your training costs and how to they contribute to your business aims

Costs Structure

  • Which costs are fixed and which vary directly with output
  • How do your costs relate to your different outputs

Balance sheet

Stocks

  • How do the stock values in your accounts relate to actual physical stock counted
  • Is there any spoiled, damaged or obsolete stock
  • Do you have efficient stock ordering/holding  periods and systems
  • How effective is your stock control

Debtors

  • What is the value of debtors and when due for payment
  • Have any of the debtors taken longer than the agreed credit period
  • How do these debtor values compare with previous periods

Creditors

  • What is the value of creditors outstanding and when are they due for payment
  • Are any due amounts apparently unpaid and for what reason
  • Is your business taking the agreed credit periods
  • Are there amounts due not included on your creditors ledger

Cash

  • Does the value in the accounts reconcile to the bank statement
  • Are there any unidentified receipts or payments
  • Are there any returned receipts or payments

Cash flow

  • Vital information – but covered in these articles here, here and here

The information you need will vary according to your business. Some measures will be easy to obtain. In fact, once you have the appropriate systems and reports most of this information is easy to gather and analyse on a timely and regular basis.

 

If you have any questions I’d be very pleased if you post on this site or contact me here.

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