This Presentation is on management reporting system.
{Reports means a document which helps the management for decision-making process.}
and it includes details about following points :-
Introduction
Objective of reporting
Principles of reporting
Importance of reporting
Qualities of good report
Types of Reports
Forms of Reports
Reports submitted to different level of Management
General Format of Reports
4. Introduction
• The term'reporting' conveys different meanings on different circumstances.
• In a short termit means supplying factsand figures.
• On the other hand, whena committeeis appointedto studya problem, a report
is taken to mean that reviewof certain matterwithits pros and cons and
offering suggestions
• A report is a means of communicationwhichis in written formandit is useful
for management for the purpose of planningdecision-making and controlling.
5. Objective of Reporting
Meansof communication:- A report is usedas a means of upwardcommunication.
A report is preparedand submittedto someone whoneeds that information for
carrying out the functions of management.
Satisfyinterestedparties:- the interested parties of management report are top
management,executives, government agencies, shareholders, creditors, customers
and general public. Different types of management reports are prepared to satisfy
above mentionedinterested parties.
Serve as a record:- reports provide valuableand important records for reference in
the future. As the facts and investigationsare recorded withutmost care, they
becomea richsource of information for the future.
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Legal requirements:- some reports are prepared to satisfy the
legal requirements.
Basis to measure performance:- the performance of each
employee is preparedin a report form.
Control:- reports are the basis of control process. On the basis of
reports, actions are initiatedand instructions are givento improve
the performance.
7. Principles of Reporting
Completeness:- The measures, in the aggregate, should cover all aspects of
the reportingentity's mission.
Legitimacy:- Reports should be appropriatefor the intended users and
consistent in formand content withaccepted standards.
User friendliness:- Reportsshould be understandable to reasonably
informed and interested users, and should permit information to be
captured quicklyand communicated easily.
Reliability:- Theinformation presented in the reports should be verifiable
and freeof biasand faithfully.
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Relevance:- the report must be relevant.
Consistency:- Consistency is requirednot onlyinternally, but alsoover time,
that is, once an accounting or reporting method is adopted, it should be used
for all similar transactions unlessthere is goodcause to change it.
Timeliness:- The passage of time usuallydiminishes the usefulness of
information. A timelyestimatemaythenbe more useful than precise
informationthat takes longerto produce.
Comparability:- Financial reportingshould help report usersmake relevant
comparisons among similar reporting units, such as comparisons of the costs
of specific functions or activities.
9. Importance of Reporting
i. It provides information to the management.
ii. Helps in selecting thebest profitablealternative for future.
iii. Helps in controlling the performance.
iv. Helpful in profitable operations.
v. Helpful in achieving the overall objectives.
vi. And so on…..
10. Qualities of Good Reports
The report must have a suitable title.
The report shouldbe simple andeasilyunderstandable.
A report shouldbe preparedon time.
A report must be comparable (i.e.comparingactual performance with
standard performance).
A report must be consistent.
A report shouldbe precise, accurateand specific.
A report must contain relevant information.
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• Thereportsshould be specificand presentedonly to the personin need.
• Everyreport shouldcontainthe routinedetails (time of preparingreport,date of
presentationof report,name of thepersonpreparingand presentingit, name of
personsto whomit is being submittedetc.).
• Thereportsshould give fulldetailsof variancessuch as favorableand unfavorable.
• Thecost of preparingand presenting the report shouldbe reasonable.
• Thereport must be useful to management for effectivecommunication.
• Theprinciplesof exceptionshouldbe followedwhilepreparingand presentingthe
reports.
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The report maybe in written, oral or graphic form.
The styleof presenting the report shouldattract the attention of theuser of
the report.
A report shouldcontain onlythe latest information.
A reports should be prepared and used onlyfor selectiveareas.
A reports should be prepared in a properformat.
14. Types of Reports
On the basis of objects
and purpose
On the basis of nature On the basis of period On the basis of functions
Internal
External
Enterprise Control
Routine
Special
Operating
Financial
Investigating
15. I. On the basis of Objects or purpose
1. Internal Reports - Internal report is meant for different levels of
management. This can be classified into three types: (a) Report meant for top
level management, (b) Report meant for middle level management, and (c)
Report meant for lower level management . Internal report need not conform to
any standard form as it is not statutorily required to be prepared.
2. External report - it is prepared for meeting the requirements of persons
outside the business, such as shareholders, creditors, bankers, government,
stock exchange and so on. External report is brief in size as compared to
internal report and they are prepared as per the statutory requirements.
E.g. of external reports :- profit & loss a/c, balance sheet.
16. II. On the basis of nature
1. Enterprise Report – these reports are prepared for the concerns as a whole.
These reports serve as a channel of communication with outsiders. It may
includes income tax returns, balance sheet, income statement, employment
report, chairman’s reports and so on…
2. Control report– it deals with two aspects. One is relates to the
personal performance and other deals with economic performance.
The types of report are prepared for controlling the performance.
3. Investigating Report – these reports are linked with control reports.
These reports are prepared when there is some serious problem
arises for investigating and analysing the situation.
17. III. On the basis of period
1. Routine reports – these reports are prepared about day-to-day working of
the concern. They are periodically sent to various levels of management. These
reports may relates to sales information, production figures, capital
expenditures, purchase of raw materials, market trends etc.
2. Special reports – these reports are prepared according to the need of
situation. Available accounting information may not be sufficient, so data may
have to be specially collected. There may be need to put extra staff for compiling
these reports. These reports are prepared for some purposes (i.e. make or buy
decision, technological changes in industry, market analysis, changes in
government policies and so on…).
18. IV. On the basis of functions
1. Operating reports – these reports provide information about operations of
the concern. These reports can be classified into three types :- (a) Control
reports, which are prepared to exercise control over various operation of the
business, (b) Information report, which are prepared for facilitating planning
and policy formulation in a business, (c) Venture measurement report which is
prepared to show the result of a specific venture undertaken as for example a
new product line introduced.
2. Financial reports - Such reports provide information about financial position
of the undertaking. These reports may be prepared annually to show the
financial position for the year as in the case of balance sheet or periodically to
show the cash position for a given period as in the case of fund flow analysis and
cash flow analysis.
19. Other types of reports -
PhysicalDescriptionReport – it describe the physical characteristics of a machine,
a device, or some other type of object. They also explain the relationship of one part
of the object to other parts so that the reader can visualize the object as a unit.
These are many times combined with process, analysis, or investigation reports.
ProcessReport – it explains how products are produced, tests are completed, or
devices operate by describing the details of procedures used to perform a series of
operations. Process reports may be general or detailed. General process reports are
addressed to persons not directly involved in performing the process. Detailed
process reports are designed to give the readers all the necessary information
needed to complete the process.
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Analytical Report – analytical reports critically examine one or more items, activities, or
options. This type of report usually results in conclusions and recommendations.
Examinationreport – examination reports are used to record data obtained from an
examination of an item or conditions. They are usually prepared for people
knowledgeable about the subject and not for the general reader.
Laboratory Report – laboratory reports record and communicate the procedures and
results of laboratory activities. Equipment, procedures, findings, and conclusions are
clearly presented at a level appropriate for readers with some expertise in the subject.
They are sometimes presented in laboratory notebooks using neatly handwritten text
and charts.
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Literature Review– literature reviews are logically organized summaries of the
literature on a given subject. It is important that they are correctly documented
and accurately represent the scope and balance of the available literature.
Design Portfolio– design portfolios are organized presentations of preliminary
and final designs of items such as mechanisms, products, and works of art. The
presentation may be in the form of notes, sketches, and presentation
illustrations.
And so on…..
22. Forms of reports
☺Oral Reports– an oral report is not very popular as it does not serve any
evidence and cannot be referred to in future. Oral report may take the form
of a meeting with individuals or a conference.
☺Descriptive form– these reports are in written form they serve as a evidence
in future.
☺Comparativestatement – these reports are preparing for comparison of
actual result to standard result.
☺Diagrammaticand graphic representation– under this form information
are shown in graphical forms.
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☺Break-Even Chart - This type of chart is prepared to show the relationship
between variable and fixed cost and sales. It shows the point of no-profit
and no-loss or where total cost equals total revenue received.
☺Gantt Charts - This chart was first introduced by Heny L. Gantn. It is a
special type of bar diagram under which bars are drawn horizontally. This
chart shows the bars of planned schedule and attained performance. They
are largely used to denote utilisation of machine capacity.
24. Reports submitted to different levels of Management
• The reports are submitted to different levelsof Management :-
1. Top-level Management
2. Middle-level Management
3. Lower-level Management
26. Reports to Middle-Level Management
It consistsof different departmental managerssuch as productionmanager, sales
manager,finance manager, purchasemanager,chief accountant etc.
It assignedtheworkfor executingvariouspoliciesframedby topmanagement.
Reportsare preparedon the basisof different departments. Suchas –
i. Reportsfor Productionmanager
ii. Reportsfor Salesmanager
iii. Reportsfor Purchasemanager
iv. Reportsto Cost manager
v. Reportsfor Financial manager
vi. And so on……
27. Reports to Lower-Level Management
It consistsof foremen.
Theyare responsiblefor executionof policies.
They get dailyreportsfromtheir subordinates.
These reportsmay includesthe following –
a. Labourutilisationreportsand causesof lost time.
b. Workersefficiencyreport.
c. Confidentialreport
d. Scrapreport
e. Maintenancecostexpenses.
f. And so on…..
28. General Format of Reports
• The mechanical format of a report consists of three parts: the preliminaries,
the text, and the reference materials.
The Preliminaries –
a. Title page
b. Preface, including acknowledgments (if desired or necessary)
c. Table of contents
d. List of tables
e. List of Figures or illustrations
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The Text –
a. Introduction (introductory chapter or chapters)
b. Main body of the report (usually divided into chapters and sections)
c. Conclusion
The Reference Material–
a. Bibliography
b. Appendix (or Appendixes)
c. Index (if any)