This Presentation Contain Information about Report to Management

1. By- Mohammad Abu Saleh

2. The reporting to management is a process of
providing information to various levels of
management so as to enable in judging the
effectiveness of their responsibility centers and
become a base for taking corrective measures,
if necessary.

3. “Reporting to Management can be defined as
an organized method of providing each
manager with all the data and only those data
which he needs for his decisions, when he
needs them and in a form which aids his
understanding and stimulates his action”.
S.N.Maheshwari

4. A Management Accountant has to prepare the report
for the following purposes.
1. Means of Communication: A report is used as a
means of upward communication. A report is
prepared and submitted to someone who needs that
information for carrying out functions of
management.
2. Satisfy Interested Parties: 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
mentioned interested parties.

5. 4. Legal Requirements: Some reports are
prepared to satisfy the legal requirements. The
annual reports of company accounts is prepared
to furnished the same to the shareholders of
the company under Companies Act 1946.
Likewise, audit report of the company accounts
is submitted before the income tax authorities
under Income Tax Act 1961.

6. 1. It helps the management to understand
functional areas of an organization.
2. It is used as a tool to identify the areas of
weaknesses and any untoward or unusual
occurrences.
3. The performance of employees is
regulated and controlled.
4. The management can devote more time on
policy formulation and future development.
5. The future course of action is taken with great
care.

7. 5. Develop Public Relations: Reports of general progress of
business and utilization of national resources are
prepared and presented before the public. It is useful for
increasing the goodwill of the company and developing
public relations.
6. Basis to Measure Performance: The performance of each
employee is prepared in a report form. In some cases,
group or department performance is prepared in a report
form. The individual performance report is used for
promotion and incentives. The group performance report
is used for giving bonus.
7. Control: Reports are the basis of control process. On the
basis of reports, actions are initiated and instructions are
given to improve the performance.

8. 6. Responsibility is fixed on an individual and in total very
clearly.
7. It helps the management to prepare the
budget according to the ground reality of the business
conditions.
8. Report provides a basis for deciding operating policy,
volume of sales or production, stock policy, quality
production, product design etc.
9. It helps the management to maintain the operational
efficiency of all the employees and the business in
general.
10. The management can find the reasons for poor
performance and takes corrective actions for
avoiding such happenings in the future.

9. External Reports:
These reports are meant for external parties such
as government, shareholders, bankers, financial
institutions, etc., for example, published financial
statements of companies. Copies of such reports
are also to be filed with the Registrar of Joint Stock
companies and with the stock exchange.
In the interest of general understanding, these
reports are expected to conform to certain
minimum standards of disclosure and disclose
certain basic details under the Companies Act,
2013.

10. Internal Reports:
These reports are meant for internal uses of
different levels of management such as top level,
middle level, and junior level of managements.
Hence, the approach to the reporting problem
would vary according to the reporting level. These
reports do not have to conform to any statutory
standards. While the reports meant for top
management have to be comprehensive and
concise, the reports to operating supervisors
should be specific and detailed.

11. Routine Reports:
These reports cover routine matters and are
submitted at periodical intervals on regular basis.
Example, variance analysis, financial statements,
budgetary control statements are routine reports.
They are submitted to different levels of
management as per a fixed time schedule. Routine
reports are usually printed or cyclostyled forms with
blank spaces to be filled in. most of the internal
reports are of the nature of the routine reports.

12. Special Reports:
Reports, which are submitted on particular
occasions on specific requests or instructions, are
special reports. When problems arise in a
business, they are to be investigative. The results
of investigations and the recommendations are
submitted by way of special reports.
Examples of some of the special reports are:
1. Reports of information about competitive products,
2. Reports by the Cost Accountants on the implication of
price changes on the cost of products,
3. Reports regarding choice of products or selection of a
production method, etc.

13. Operating Reports: These reports may be
classified into Control report and Information
Report.
Control Report: is an important ingredient of
control process and helps in controlling differ-
ent activities of an enterprise. It provides
information properly collected and analyzed to
different levels of management. The framework
of this report is determined by the needs of the
undertaking.

14. Information Report:
These reports provide information, which are
very much useful for future planning and policy
formulation. They may take the form of trend
reports or analytical reports. Trend reports
provide information in a comparative form over
a period of time. On the other hand, analytical
reports provide information n a classified
manner.

15. Financial Reports:
These reports contain information about the
financial position of the business. They may
be classified into Static Reports and Dynamic
Reports. Static report reveals the financial
position on a particular date e.g., balance
sheet of a company.
On the other hand, the dynamic report
reveals the movement of funds during a
specified period, e.g., funds flow statement,
cash flow statement.

16. Generally the reporting levels in the internal
management fall into three broad categories.
They are top level, middle level, and junior
level managements. They need different
kinds of reports depending upon the nature
of functions they do.

17. Top Management Level:
The top management is primarily concerned
with the policy formulation, planning and
organizing. Hence, their function is to evolve
proper plans, to carry out proper delegation
of authority to subordinates with a view to
obtain an effective and efficient utilization of
resources and to promote appropriate
development schemes.

18. Board of Directors: Quarterly statements on
production costs, machine and labour utilization,
quarterly cash flow statements, and quarterly income
statement and balance sheet
Finance Director: Monthly abstract of receipts and
payments and monthly cash flow statements.
Production Director: Production cost statement,
department-wise machine and labour utilization
statements, and material scrap statements, overhead
cost and production statements. All these statements
are to be presented to him on a monthly basis.
Sales Director: He is to receive the following reports
on monthly basis: Reports on orders received, orders
executed, and orders kept pending – division-wise;
Reports on selling and distribution cost – division-
wise; Reports on credit collections, balances, and bad
debts – division wise.”

19. Middle Management Level:
The departmental managers such as production, sales etc.,
are concerned with the execution of plans formulated by top
management. They act mainly as coordinating executives to
administer policies, direct operating supervisors, and evaluate
their performance. Hence the reports submitted to them
should enable to exercise these functions more effectively.
They may require reports at shorter intervals, say weekly,
fortnightly basis. For example, the works manager requires
weekly reports on idle time, idle capacity, scrap production
costs, quantity produced, etc. The sales manager needs
fortnightly reports on budgeted and actual sales, credit
collection, orders booked, executed and pending, and stock
position-product-wise and area-wise.

20. Junior Management:
Foremen, Supervisors, etc., constitute this level of
management. They are interested in reports, which will
apprise them of progress of jobs under their control.
Some of these reports are almost in the form of scrap of
paper having no proper format. They may need reports
on daily or weekly basis.
For Example:
the shop foreman requires daily report of idle time and
machine utilization, daily scrap reports and daily report
of production – actual and budgeted. Sales area
supervisor needs weekly reports on sales – salesman-
wise, orders booked, executed and outstanding, credit
collections and outstanding, etc.