Development of management reporting. Management reporting - what does it include?

Dmitry Ryabykh General Director of Alt-Invest LLC, Moscow

What questions will you find answers to in this article?

• What is the difference between financial and management reporting and accounting?
• What practical conclusions can be drawn from the analysis of profitability of sales?
• What management reporting indicators should be known to the General Director
• What do potential investors pay attention to?

There are three types of company reporting: accounting (tax), financial and management. Let's figure out what the features of each of them are.

Accounting (tax) reporting make up everything Russian companies. This reporting includes the Balance Sheet, Income Statement, Tax Returns, and a number of other forms. It is interesting because it is subject to inspection by government agencies, which is why financial statements are the first thing your creditors or company partners will want to study. However, if your company uses gray schemes in its work, then the reporting data will be distorted, and you are unlikely to be able to adequately assess the situation in the company. That is why the company must also have either financial and management reporting, or simply management reporting.

Financial statements outwardly may resemble an accounting (tax) one. However, financial statements have an important difference. It is compiled not for reasons of compliance with legal regulations and tax optimization, but focusing on the most accurate reflection of real financial processes in business. This, for example, concerns the accounting of liabilities, write-off of costs, depreciation, and valuation of share capital.

Management reporting focuses on the internal aspects of the enterprise. For example, this could be any production data (such management reporting can be prepared for you by the production director), information on working with debtors and creditors, inventory data and similar figures. While not reflecting the full picture of the business, management reporting provides good foundation to set goals and monitor their achievement. It is especially important to prepare management reporting in small and medium-sized companies that do not keep all data officially. In fact, only guided by management reporting will you be able to assess the real state of affairs in the company (see also Two principles for working with any reporting).

Key financial reporting indicators

Financial statements are usually prepared for large enterprises. In this case, they are guided by International Financial Reporting Standards (IFRS) or the American GAAP standard. For managers of small and medium-sized companies, I recommend that the indicators described below be formed at least as part of management reporting. You can entrust this work to the financial director or chief accountant.

1.Sales profitability. This is the most important indicator, and it is what you need to pay attention to first. Return on sales, that is, the ratio of net profit to turnover, is never calculated on the basis of financial statements; what is needed is a financial report. If it is not there, then you should analyze management reporting. An increase in return on sales is good, but a decrease indicates problems. The rate of return is usually determined by the enterprise itself; its value depends on the market sector, the chosen strategy and a number of other factors.

High profitability is a signal that the company can invest much more freely in long-term projects and spend money on business development and increasing competitiveness. Success must be developed and consolidated. If profitability is low, it is necessary to determine a set of measures aimed at either increasing sales or reducing costs. Or strive to influence both sales and costs. For example, you can reduce investments in long-term projects and try to get rid of non-production costs.

2. Working capital. You can analyze working capital both on the basis of financial and accounting statements. However, the conclusions will be different. Financial reporting evaluates the quality of actual working capital management. The analysis includes the study of the most common indicators:

• inventory turnover (reflects the speed of inventory sales, while high inventory turnover increases the requirements for the stability of supplies of materials and can affect the sustainability of the business);
• accounts receivable turnover (shows the average time required to collect this debt; accordingly, a low value of the ratio may indicate difficulties in collecting funds);
• accounts payable turnover.

Inventory and accounts receivable are funds frozen in the company's current business processes. If they are large, then the company will become inactive, will bring low profits to shareholders, and will require borrowing. But on the other hand, a decrease in inventories can jeopardize production or trade, and strict requirements for debtors will affect the attractiveness of your company to potential customers. Each company must determine for itself the optimal values ​​of the indicators, and among the financial management tasks that the General Director should be interested in, regular monitoring of the level of working capital will occupy not the least place.

Accounts payable, when increased, can provide a free source of financing. But, as with accounts receivable, it cannot simply be increased - this will affect the liquidity and solvency of the company. Here, too, the optimal value to strive for should be determined.

An analysis of working capital items based on financial statements (in particular, Section II of the balance sheet “Current assets”) will show you, for example, how well the document flow is established in the company. To do this, compare the turnover on the balance sheet with the turnover calculated according to financial or management reporting, as well as with your optimal values. If the data diverges, it means that not all financial documents reach the accounting department. Because of this, non-existent inventories, assets, and liabilities begin to accumulate in the accounting accounts and, accordingly, in the balance sheet. For example, some costs have already been written off to production, but they are still listed in the balance sheet under the item “Inventories”. The appearance of such “garbage” also indicates that your company is incurring unnecessary tax risks and is not taking advantage of legal opportunities to reduce tax payments.

3. Assets and liabilities. These characteristics determine the financial position of the company in the long term. In operational management, financial services should monitor these indicators. But it is also useful for you to periodically ask yourself a number of questions in this area:

• Does the company have enough fixed assets? Are they maintained in new condition? This is relatively easy to check. Annual investments in equipment and transport should be no less than depreciation of property (and as a rule, 20-30% more to compensate for inflation).
• What is the company's total liabilities? What proportion of liabilities do I occupy in the company's assets? How much does annual turnover cover liabilities?
• What is the share of interest-bearing debt (bank loans and other obligations on which strictly defined interest must be paid)? How much does annual profit cover interest payments?

Otherwise, you can leave the financial statements to the financial director for analysis.

Management reporting

If financial and accounting reporting is built according to uniform rules and covers all the activities of the company, then management reports are individual and, as a rule, focused on individual aspects of the work. Among the management reports that the General Director studies, the following are most often present:

1. Report on production indicators, that is, the physical volumes of work. The contents of this report vary greatly depending on the type of business. If this is industrial production, then the report indicates the number of units of goods produced and shipped to customers. In trading, this can be either monetary sales figures or physical sales volumes for key products. In the project business, such a report can be based on schedules for the implementation of work plans.

2. Analysis of the structure of income and costs. The report may include the cost of products sold and the profitability of their sales, or may only reflect the situation as a whole. The General Director's task when studying these reports is to see cost items that are growing unreasonably, and also to discover that the company is beginning to sell some of the services or products at a loss. Accordingly, the cost structure is selected so that on its basis it is possible to easily formulate the tasks that require solutions. A very common option is to structure all costs both by item and by place of origin (divisions, branches, etc.).

Let's put all of the above into a single plan according to which the General Director can build his work with reporting. You can customize this plan to suit the specifics of your business. However, for starters, you can use it without modifications (see. table).

Table. What reporting indicators should the General Director study?

The company through the eyes of a lender or investor

The last element of financial analysis you can perform is evaluating the company from the perspective of shareholders and creditors. It is better to do it on the basis of financial statements, since these are the statements that the bank will use. The simplest assessment option includes:

• calculation of a company’s credit rating using the methodology of one of the banks;
• calculation of business value. One way to calculate is by comparison with other companies. In this case, one or two key “value drivers” are identified and market coefficients for them are calculated.

Calculating these metrics from scratch can be inconvenient. But by including them in the set of standard reporting provided by financial services, you will have a good picture in front of your eyes, reflecting a strategic view of the state of affairs in the company.

It is known that the company working with good bank or investor, often has a stable financial condition. This is also due to the fact that its activities are regularly monitored, based on objective reporting data, and deviations from the recommended indicators cause a harsh reaction from the investor. Any company can achieve a similar result. But to do this, you must more often rely in your judgments and orders on data from financial and management reporting.

Two principles for working with any reporting

1. No report is perfect or universal. Some aspects are reflected worse, others better. Therefore, it is important to understand what was most important in preparing the report you are studying and concentrate only on this. As a rule, from each report you can glean two or three indicators that are most accurately reflected in it, so you will inevitably have to work with different sources data for analysis.

2. Study only what you can control. If, based on some report, you do not plan to set goals for your subordinates, then this report may be interesting, but it is not directly related to the management of the company. It is better to put it in the background. Of primary importance are reports that can be directly used in the strategic or tactical goals of the company and from which the degree of achievement of these goals can be calculated.

Concept and types of reporting The role of information in the modern business world is steadily increasing. Reporting is the final stage of the accounting process, therefore it includes generalizing final indicators obtained through appropriate processing of current accounting data. The preparation of internal reporting is caused by the need for management within the organization. The purpose of preparing management reporting is to satisfy the information needs of management within the organization by providing cost and physical indicators...

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Subject: U management reporting

1. Concept and types of reporting

The role of information in the modern business world is steadily increasing. IN entrepreneurial activity Business success, expressed in making a profit, depends on the quality of the economic information used. To make informed investment decisions, select clients, suppliers, and other business partners, complete and reliable information is required. In the enterprise management system, internal reporting of divisions is the most important control tool, representing systematized and summarized information.

A report means the information received, presented in a form acceptable to the user. A report is a certain amount of information containing only the information required by the user, which is grouped in the most convenient way.

Reporting is a system of interrelated indicators characterizing the conditions and results of the activities of an organization or its divisions for the past period. Reporting is the final stage of the accounting process, therefore it includes generalizing final indicators obtained through appropriate processing of current accounting data. Reporting is the main source of information used for analysis and management decision-making.

Reporting used in practice is divided into types according to the following criteria:

• by the volume of information presented in the report;
• according to the purpose of compilation;
• according to the frequency of presentation.

Based on the amount of information provided, a distinction is made between private and general reporting. Private reporting contains information about the results of activities of any structural unit of the organization or about individual areas of its activities, or about the results of activities of branches. General reporting characterizes the results of the organization as a whole.

Depending from the purposes of compilationswelling can be external and internal. External reporting serves as a means of informing users about the nature of the activities, profitability and property status of the organization. The preparation of internal reporting is caused by the need for management within the organization.

Depending on the period covered by the reporting, a distinction is made between periodic and annual. Reporting compiled at certain intervals (week, decade, month, quarter, six months) is periodic. Annual reports are prepared within the time limits regulated by current regulations.

Management reporting- internal reporting on the conditions and results of the activities of the organization’s structural divisions and individual areas of its activities.

Purpose of management reporting- meeting the information needs of management within the organization by providing cost and natural indicators that allow assessing and monitoring, forecasting and planning the activities of its structural units, as well as specific managers.

The purpose of compiling internal reporting determines its frequency, form, and content. The accuracy and volume of data provided in the reporting depend on the organizational, technological and economic features inherent in the organization and the specific management accounting object, and the management goals in relation to this accounting object. The content, forms, timing and obligation to submit management reporting, as well as its users, depend on the business conditions of a particular organization.

The management reporting system is one of the most complex and important elements of management accounting. When creating a management reporting system, it is necessary to:

Determine the form, deadline for submitting the report and the person responsible for its preparation;

• draw up a scheme for generating management reports, identify the owners of the source information;
• vest the person in charge with the powers of a coordinator, i.e. administratively allow him to receive information from its owners;
• determine the users of the information and the form in which it will be provided to them.

Work on the implementation of management reportingis carried out in several stages.

First stage - determining the volume and content of the necessary information and resolving the issue of obtaining it from the applicable documents. To do this, an analysis of the information contained in the accounting registers is carried out. It is important to determine the sources of obtaining the necessary information, which may be located in functional units. It is advisable to analyze the very fact of the availability of the necessary information.

For example , a situation may arise when existing forms of primary documents do not have the details necessary to obtain the corresponding report. In this case, work should be done to finalize these document forms. Most often, as a rule, primary documents contain the necessary amount of information. However, this information is not processed in the form of management reporting. In this case, it is necessary to determine the form of the relevant reports, assign those responsible for receiving them and oblige the owners of this information to provide these reports at a specified time.

The second stage is the stage of analyzing the information contained in the accounting registers,aimed at ensuring that information that corresponds to management reporting, as well as information necessary for the strategic analysis of the organization's activities, is reflected in accounting registers. To obtain such information directly from accounting registers, it is advisable to improve analytical accounting in such a way that the necessary information is constantly reflected in it.

Third stage - Creation automatic system generation of management reporting. This is possible with the appropriate software.

2. Users of management reporting and periods of its submission

The main users of management reporting are managers at all hierarchical levels of organizations.

Information from internal reporting is necessary for making management decisions on issues related to the assessment of the activities of responsibility centers by managers at higher levels; identifying trends in the development of responsibility centers; shortcomings and positive aspects in their activities. Internal reporting is information support for management decisions and optimization of the organization’s activities as a whole.

For example , reporting on profit and investment centers makes it possible to make a forecast about the dynamics of the organization’s profit and assess the risk of new long-term investments.

Familiarizing the organization's personnel with management reporting data improves relationships within the team and builds employee confidence in their position.

The timing and frequency of management reporting is an important parameter that significantly affects the effectiveness of the entire system.

The frequency of preparation of management reporting is an individual issue. However, the general criterion for choosing reporting periods is the timeliness of making management decisions based on reporting data. At the lower levels of management, the role of efficiency in decision-making is higher than at the upper levels. Therefore, reporting periods at lower levels should be shorter.

Conventionally, three standard time periods can be distinguished, which are basic for organizing accounting and presentation:

• short-term reporting;
• mid-term reporting;
• periodic (strategic or long-term) management reporting.

Short term The reporting that is provided most frequently is considered: daily and weekly. However, due to the specifics of production, monthly reporting may serve as short-term reporting. Short-term reporting is the provision of information from primary documents in certain aspects, i.e. it is information that is most relevant to the organization and reflects important and dynamic aspects of its activities. The main users of such reporting are middle managers or line managers. They must make management decisions based on this information.

The second time period is medium term. Management reporting for this group is prepared at intervals ranging from once a week to once a month. Such reporting combines the organization’s performance indicators and necessarily contains forecast indicators for the next period.

For example By analyzing the cost of production for a month, you can make forecasts of its changes for next month in accordance with changes in market prices for materials and components, i.e. track changes in the cost of raw materials. Based on the data from such reporting, it is possible to predict changes in prices for manufactured products and show changes in their profitability. The consumers of such reporting are higher-level managers: the organization's management, senior managers. Many decisions that are made on the basis of management reporting compiled in the medium term can have a significant impact on the activities of the organization as a whole.

Long-term management reportingcompiled at intervals from once a month to once every six months. It is prepared for the purpose of establishing a relationship with the financial statements to show changes and relationships between management indicators and reporting data. This is due to the fact that financial statements are submitted once a year. In connection with the use of a quarterly financial reporting system, long-term management reporting is a purely strategic, analytical tool, since it is necessary to respond to changes in the situation once a quarter, in accordance with the frequency of financial reporting. In accordance with this, short-term management reporting, which should reflect the dynamics of changes, including in tax planning, acquires great importance.

The frequency of internal reporting is determined by the organization itself; it is individual for each group of responsibility centers and segments. It is important to have a clear reporting schedule. Internal management reporting is an integral part of the overall internal control system in the organization.

In the absence of timely feedback, there is a high probability that the manager’s work will get out of control, and his goals and plans will lose relevance and remain on paper. A manager should always know how effective his activities are. If his plans are not being carried out, he must find out about it as early as possible. Otherwise, he is deprived of the opportunity to take corrective measures and make changes that are necessary to update the assigned tasks. Internal management reporting is prepared for the manager who is responsible for achieving the set goals.

The disadvantages of internal reporting, typical of traditional approaches to internal control, are that the emphasis is on errors rather than providing managers with information to take effective action. As a result, feedback turns out to be aimed at conducting audits and searching for omissions, returns the manager to past events and operations, generates data that can no longer be corrected, and limits the ability to act with perspective.

3. Basic requirements for management reporting of an organization

Competently compiled and timely submitted management reporting ensures the solution of the following tasks:

• quick overview of activities;
• presentation of information on actual performance;
• definition existing problems and shortcomings, as well as an indication of potential future problems;
• providing information for choosing the best options for solving issues and problems of daily activities, as well as for making strategic decisions.

Operational management decisions are made on lower levels to the maximum of the data presented, at the highest levels of management the volume of information is reduced, and responsibility for decisions made (their significance) increases.

Formal and special requirements are imposed on the construction and content of internal reporting.

Formal requirements for internal reporting:

• expediency;
• objectivity and accuracy;
• efficiency;
• brevity;
• comparability of reporting;
• targeting;
• efficiency.

Feasibility -information summarized in internal reports must be consistent with the purpose for which it was prepared.

Objectivity and accuracy -internal reports should not contain subjective opinions and biased assessments; the degree of error in reports should not prevent the adoption of informed management decisions. Since the efficiency of reporting affects the accuracy of the information received, therefore, one should strive to minimize this factor.

Efficiency - reporting must be submitted by the deadline, which is important for timely decision-making.

Brevity - the reporting should not contain redundant information: the smaller the volume of the report, the more quickly you can comprehend its content and make an appropriate decision.

Comparability of reporting -the ability to use reporting information for the work of different responsibility centers; reporting should also be comparable with plans and estimates;

Targeting - information from internal reporting must be communicated to the responsible person, and confidentiality must be maintained.

Efficiency - the costs of obtaining internal reporting must be comparable to the benefits of using management information.

The purpose of internal reporting is to provide management personnel at all levels with the necessary information. Requirements for the content of reporting should be formulated by heads of responsibility centers and other persons related to management personnel or interested in internal management information. For users (managers), not only the content of information is important, but also the methods of its delivery and reporting forms. Internal reporting should provide the ability to quickly review and evaluate actual results, their deviations from the goal, identify shortcomings now and in the future, and select the best options for making management decisions. Generating reporting that allows you to obtain information to solve a set of problems is not easy.

Special Requirementsrequirements for internal reporting:

• flexible but uniform structure;
• clarity and visibility of information;
• optimal presentation frequency;
• suitability for analysis and operational control.

Primary analytical information should be provided directly in the reporting forms: deviations from goals, standards and cost estimates, ranking of deviations, etc.

Flexible but consistent structurereporting information follows from the very essence of internal management and management accounting. Information must have sufficient internal flexibility to respond to the changing goals and needs of responsibility center managers. At the same time, it is necessary to ensure information uniformity. The management accounting and internal reporting system may change due to significant changes in the nature of the organization's activities.

The flexibility and uniformity of internal management information is ensured by the fact that the required amount of data is accumulated at the primary level of registration, which can then be selected and grouped in the required information context. If you do not select the necessary data at the stage of entering it, then subsequently it will be problematic to obtain the information necessary in each specific case. Each responsibility center should receive reports that contain the necessary information. The information system must be designed in such a way that there is a certain uniformity of data for grouping and comparison.

Clarity and visibility of informationboils down to the fact that each reporting form must contain the information necessary for a specific user. Excessive detail of reporting information and its overload with unimportant indicators make it difficult to understand the reporting and prevent the adoption of correct management decisions.

Optimal reporting frequencyis derived from the purpose of information and decision-making capabilities, i.e., from the factors that determine the use of reports in management. Some reports are used more often than others. The frequency of internal reporting varies. Internal reports may be annual, quarterly, monthly, weekly, daily, or as deviations occur. There is no need to increase the frequency of reporting if it is not possible to make a decision based on it. If staff bonuses are paid quarterly, then there is no point in receiving monthly information about the fulfillment of bonus conditions. More frequent and more detailed reporting is needed at lower levels of management. With the transition to higher levels, reporting is presented less frequently and contains more aggregated indicators.

4. Management reporting format

Based on internal reporting, decisions are made at all levels of management of the organization. It is important to reduce the time that passes from receiving a report to developing a decision and translating it into control actions. The accessible form of the internal report, the location and presentation of relevant information are essential. There cannot be a standard set of internal reporting with uniform forms and information structure. Internal reporting is individual. It is possible to identify classification characteristics that characterize general approaches to internal reporting forms.

• complex;
• thematic (by key indicators);
• analytical.

Comprehensive summary reportsare presented, as a rule, for a month or other reporting period (quarter, six months, etc.), they contain information on the implementation of plans and the use of resources for a given period, on income and expenses by responsibility centers, on the implementation of cost estimates, profitability , cash flow and other indicators for general assessment and control.

Thematic reportsare presented as deviations occur on the most important indicators for the successful functioning of the organization, such as: sales volume, losses from defects, short deliveries on orders, production schedule and other indicators controlled by the responsibility center.

Analytical reports are provided only at the request of managers and contain information revealing the causes and consequences of results on individual aspects of activity.

For example : a comprehensive assessment of the reasons for overexpenditure of resources, changes in profitability, sales levels by market sector, analysis of the market and the use of production capacity, risk factors for activity in certain areas, etc.

By management levelsreports are divided into:

• operational;
• current;
• summary reports.

Operational reports, presented at the lower level of management in responsibility centers, contain detailed information for making current decisions; are compiled weekly and monthly.

Current reports , containing information for the middle level of management in profit centers and investment centers, are compiled at intervals ranging from monthly to quarterly.

Summary reports are formed for senior management personnel of the organization. On their basis, strategic decisions are made and general monitoring and control of the activities of management personnel is carried out at the middle, sometimes at the lower level. The frequency of these reports ranges from monthly to annual.

Operational information addressed to lower-level responsibility centers should not be presented unchanged to the highest level of management. At the lower level, operational decisions are made to coordinate and implement production plans for the use of department resources. This information should be summarized and aggregated into more general indicators for presentation to the middle level of management. At the highest level, an even greater degree of generalization of information is required.

By volume of informationinternal reports are divided into summaries, final reports, general (summary) reports.

Summary - this is brief information about individual performance indicators of a department for a short period (sometimes per day, week).

Final reports compiled for a month or other reporting period. They summarize information about the controllable indicators of the responsibility center.

General (summary) reportsare compiled for the organization as a whole and contain information that corresponds to financial reporting forms adapted for internal management purposes.

By presentation forminternal reports may betabular, graphic or text form.

Tabular form presentation of internal reporting is most acceptable for compilers and users. Most of the internal reporting information is expressed in numerical indicators, which are most conveniently presented in tabular form. Moreover, it has become traditional. It is important to correctly structure reporting indicators, divide them into zones, highlighting the main ones that require special attention. To clarify the report, a note may be prepared with comments and disclosure of key indicators.

Graphic formmore visual, but you should not overload graphs (diagrams) with unnecessary digital information. Displaying more indicators on a given form makes it difficult to understand. A large amount of digital data is more clearly presented in tabular form.

Text form presentation of information is acceptable in cases where there is no digital data or its volume is insignificant; The relationship and significance of the information presented must be explained in detail. Text reports are often compiled to complement reports presented in tabular or graphical form.

For the main periodically generated management reports, it is advisable to approve the format, content, timing and frequency (frequency) of presentation, as well as the rules for distribution. Standardization will increase the efficiency of preparing and presenting reports and will save the time that managers need to familiarize themselves with and comprehend the information provided. Standardization does not mean that all managers will receive the same reports. Managers will be informed about the set of reports and in what form and with how often (daily, weekly or monthly) they will receive. The set of reports should include the necessary comments and explanatory information. Additional analytical information can add value to the data presented.

Thus, the determining factor in the formation of a management reporting system in an organization is its economic efficiency, i.e., the benefits that the organization will receive from the availability of reporting by improving the quality of management decisions made. The implementation and use of a management reporting system is considered justified when the resulting positive effect exceeds the costs required to create such a system.

Internal reporting is not the result of management analysis, which is the most important element of management accounting, but the primary material for such analysis. Based on its information, one can give a general assessment of the results of the activities of responsibility centers, judge the degree to which they have achieved their goals and the correctness of the operational corrective decisions made.

More often, organizations use a three-level system for generating management reporting. The main levels are:

• journals (books) - to record all operations of the organization in accordance with the field of activity or by division;
• reports - brief information about the activities of a unit on a specific date;
• final reports - reports presenting the results of the activities of the organization as a whole and its structural divisions for a certain period.

The structure of management reporting includes reports in accordance with the following classification:

• comprehensive reports;
• reports on key indicators;
• analytical reports.

a) comprehensive reports - usually submitted monthly.

Comprehensive reports may reflect the following indicators: profitability of the organization as a whole and its structural divisions; structure of income and expenses by responsibility centers, structural divisions, individual projects, etc.; accounts receivable indicators and estimates of the provision for doubtful accounts receivable; the amount of reserves and the estimate of the reserve for depreciation of reserves; cash flow and forecast of future use and receipt of funds.

b) reports on key indicators - presented on a specific date at any time. They reflect the most important factors for the successful functioning of the organization: the number of orders received; shortfalls in orders; volume of products produced; volume of products sold; percentage of malfunctions or defects; planned performance results; efficient use of resources.

c) analytical reports - prepared at the request of management.

Analytical reports are designed to more deeply reflect individual aspects of activity. Examples of issues covered in research reports may include: reasons for increasing inventory levels leading to freezing of funds spent on acquiring these assets, inventory depreciation and losses, and therefore greater exposure to business risks; reasons for the excessive increase in overtime hours leading to increased costs for wages personnel; change in the organization's share in the corresponding market segment.

Analytical reports also reflect the market situation, the relationship between external and internal factors of the organization’s development, reveal existing threats and opportunitiesdevelopment of the organization. Ta cue reports are compiled as the need for them arises.

The focus, format and content of analytical reports have no restrictions. Reports should be characterized by a clear statement of the issues and objectives to be disclosed; contain a description of the analysis method, definitions of new terms, quantitative and qualitative data necessary for understanding the report, disclose all applied assumptions and their assessment; provide the user with a summary of results and conclusions, as well as a description of risk factors.

Examples of reports that are generated in the management accounting system of an organization are:

Current activity reports:on the production of products (works, services); on the sale of products (works, services); about procurement; on accounts receivable and payable; on finished product inventories; about work in progress; on stocks of raw materials and components; about barter transactions; about cash flow, etc.

Investment activity reports:on the movement (acquisition and disposal) of fixed assets, on the movement (acquisition and disposal) of intangible assets, on planned long-term investments in the context of investment projects.

Financial activity reports:about short-term financial investments; on attracting and servicing borrowed capital; attracting equity capital, etc.

Managing any company is unthinkable without timely and accurate information about its condition. This information is the basis for making all financial decisions, including entering the global capital markets. But what to do if the data necessary for control like air does not arrive on time or, even worse, contradicts each other. What decision should the general director make if, in response to a request for sales volume for the last month, the sales department, finance department and accounting department submit “independent” data that differ by an order of magnitude? What to do in such a situation? Trust one of the divisions? Or calculate the average? Or maybe instruct subordinates to come to an agreement among themselves and “turn a blind eye” to discrepancies?

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

WHERE DOES MANAGEMENT INFORMATION COME FROM?

One of the sources of management information is accounting. With such a statement, we may shock supporters of management accounting, who traditionally separate it from accounting, fiscal goals from management requirements, external users from internal ones, etc. But in reality, domestic accounting has historically carried a managerial burden. At some enterprises that have not lost the experience of the Soviet economy, information on costs by elements, items, places of origin 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 costs and cost estimates are calculated one day after the release of a batch of products or the provision of services.

But this managerial orientation of accounting is the exception rather than the rule. Fiscal goals impose their own specifics on the order of reflection 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 records 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 departments of enterprises and companies, operational accounting of contracts and relationships with counterparties, movement of material assets, receipts and payments, etc. is organized spontaneously or under centralized leadership. Its peculiarity is its focus exclusively on management goals, as well as the use of undocumented sources of information, forecast estimates, etc.

What is obtained by combining accounting and operational accounting data is called management accounting. But simple aggregation cannot achieve comparability of data. Therefore, some enterprises rely more on accounting, while for the management of others, operational accounting is a priority. On average, the following picture emerges (see table).

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 detail of factual information, etc.;
• for those who use primarily operational accounting, - unsatisfactory financial position when conducting a formal assessment of financial statements by external users (tender commissions, investors, etc.). It is paradoxical that such a conclusion can appear in conditions when the enterprise does not have financial problems.
• for those who use both accounting and operational data, - incomparability of management data obtained from various 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 unified information space for accounting information based on an ERP system.

All actual data is entered into this system once, after which it is 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, performed at any frequency at the user’s request.

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

First, to “photograph” the current state of affairs (you need to find out how management information is now received, where it comes from (from accounting or operational accounting), where there is duplication of data).

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

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

At first glance, it seems that the best result will be brought by a complete 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 the discrepancies, we propose to use factor analysis followed by comparison of its results with previously established level materiality. If the discrepancies are minor, then no additional work is necessary. Otherwise, you will still have to reconcile the data by position.

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

Example. An oil and gas production 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 petroleum products, and receives daily information on sales of oil shipments from the trader’s office in electronic form. Documented information (acts of transfer of oil to an offshore trader) is sent to the accounting department by mail, where it serves as the basis for accounting records.

On the first days of the month following the reporting month, departments prepare reports for general director. The sales department report is generated in market prices and in dollars. Accounting prepares reports in accordance with accounting rules.

In conclusion, it should be noted that the approach we propose is not a panacea in the fight against the heterogeneity and incomparability 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 - discrepancies in sales volumes, prices and exchange rate differences, at the same time does not reflect the full complexity of civil law relations that arise in holdings with their offshore companies, service companies, etc. As the business process becomes more complex, 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 data reconciliation with the costs of implementing an ERP system and, in some cases, formulate a reasonable question: “Or maybe it’s ERP after all?”

Excel spreadsheet systems
with convenient analytics

Setting up initial (managerial) accounting is the creation of tools for obtaining information about the actual state of affairs in the business. Most often this is a system of tables and reports based on them in Excel. They reflect convenient daily analytics about real profits and losses, cash flow, salary arrears, settlements with suppliers or customers, costs, etc. Experience shows that a system of 4-6 easy-to-fill tables is enough for a small business.

How it works

The specialists of the My Financial Director company delve into the details of your business and create an optimal system of management accounting, reporting, planning, and economic calculations based on the most available programs (usually Excel and 1C).

The work itself consists of entering initial data into tables and takes no more than 1-2 hours a day. To carry it out, 1-2 of your existing full-time specialists who do not have accounting skills are enough.

A system of tables can be organized with division of access to information. The big picture and the secret part of the data will only be seen by the director (owner) of the business, and the performers will each see their own part.

The resulting automatic reports provide a picture with the required level of detail: cost and profitability separately by product line, cost summaries by expense groups, profit and loss statement, cash flow statement, management balance sheet, etc. You make decisions based on informed, accurate and operational management information.

In the Questions and Answers section you will find examples of a cash flow plan and a cash flow accounting system with accompanying reports.

IMPORTANT! You receive services at the level of an experienced financial director at the rate of an ordinary economist.

Teaching or conducting

We make sure to train your employees independent work with tables. If you have no one to entrust this work to, we are ready to outsource your accounting. This is 2-3 times cheaper than hiring and maintaining an individual.

Guaranteed support and support 24/7

The work performed is covered by a guarantee. The initial accounting system is maintained in working order as long as you use it. If desired, you receive all the necessary consultations and clarifications.

If you want to change or add something, our specialists will make the necessary modifications, regardless of how long ago the service was provided. Contact us, the support service is available 24/7.

Where to begin

Call +7 950 222 29 59 to ask any questions and receive additional information.

Download analyzes and reports in Excel format

Archive of example files for site articles on implementation various tasks in Excel: analyses, reports, document forms, tables with formulas and calculations, graphs and diagrams.

Download examples of analyzes and reports

Telephone directory template.
Interactive contact directory template for business. Convenient management of a large contact database.

Inventory accounting in Excel free download.
The warehouse accounting program is created exclusively using functions and standard tools. No macros or programming required.

Return on equity formula "ROE".
A formula that displays the economic meaning of the financial indicator “ROE”.

Management accounting in an enterprise - examples of Excel tables

An effective tool for assessing the investment attractiveness of an enterprise.

Supply and demand schedule.
A graph that displays the relationship between two main financial quantities: supply and demand. As well as formulas for finding the elasticity of supply and demand.

Complete investment project.
A ready-made detailed analysis of the investment project, which includes all aspects: financial model, calculation of economic efficiency, payback periods, return on investment, risk modeling.

Shortened investment project.
A basic investment project, which includes only the main indicators for analysis: payback periods, return on investment, risks.

Analysis of the investment project.
Full calculation and analysis of the profitability of an investment project with the ability to model risks.

Gordon's formula graph.
Plotting a graph with an exponential trend line using the Gordon model to analyze investment returns from dividends.

Bertrand model diagram.
A ready-made solution for constructing a graph of the Bertrand model, which can be used to analyze the dependence of supply and demand under conditions of price dumping in duopoly markets.

Algorithm for decoding TIN.
Formula for deciphering the Tax Indicator Number for: Russia, Ukraine and Belarus.

All types of TIN (10 and 12-digit numbers) of individuals and legal entities, as well as a personal number are supported.

Factor analysis of variances.
Factor analysis of deviations in the marginal income of an enterprise taking into account the indicators: material costs, revenue, marginal income, price factor.

Time sheet.
Download a time sheet in Excel with formulas for auto-filling the table + maintaining reference books for ease of work.

Sales forecast taking into account seasonality.
A ready-made sales forecast for the next year based on the previous year’s sales figures, taking into account seasonality. Forecast and seasonality charts are attached.

Forecast of enterprise performance indicators.
Form for forecasting the activity of an enterprise with formulas and indicators: revenue, material costs, marginal income, overhead costs, profit, return on sales (ROS)%.

Work time balance.
A report on planning the working time of enterprise employees according to such time indicators as: “calendar time”, “time”, “maximum possible”, “attendance”, “actual”.

Sensitivity of the investment project.
Analysis of the dynamics of changes in results in relation to changes in key parameters is the sensitivity of the investment project.

Calculation of the store's break-even point.
A practical example of calculating the timeframe for breaking even for a store or other type of retail outlet.

Table for financial analysis.
The software tool is made in Excel and is designed to perform financial analyzes of enterprises.

Enterprise analysis system.
An informative financial analysis of an enterprise can be easily carried out using an analytical system from professional specialists in the field of economics and finance.

An example of a financial analysis of business profitability.
A table with formulas and functions for analyzing business profitability based on the financial indicators of the enterprise.

An example of how to maintain management accounting in Excel

Management accounting is intended to represent the actual state of affairs at the enterprise and, accordingly, make management decisions based on these data. This is a system of tables and reports with convenient daily analytics on cash flow, profits and losses, settlements with suppliers and customers, product costs, etc.

Each company chooses its own method of maintaining management accounting and the data needed for analytics. Most often, tables are compiled in Excel.

Examples of management accounting in Excel

The main financial documents of the enterprise are the cash flow statement and balance sheet. The first shows the level of sales, costs of production and sale of goods over a certain period of time. The second is the assets and liabilities of the company, equity capital. By comparing these reports, the manager notices positive and negative trends and makes management decisions.

Directories

Let us describe the accounting of work in a cafe. The company sells its own products and purchased goods. There are non-operating income and expenses.

An Excel management accounting spreadsheet is used to automate data entry. It is also recommended to compile reference books and journals with initial values.

If an economist (accountant, analyst) plans to list income by item, then the same directory can be created for them.

Convenient and understandable reports

There is no need to include all the figures for the cafe’s work in one report.

Let these be separate tables. And each one takes up one page. It is recommended to widely use tools such as “Drop-down lists” and “Grouping”. Let's look at an example of management accounting tables for a restaurant-cafe in Excel.

Income accounting

Let's take a closer look.

accounting, reports and planning in Excel

The resulting indicators were found using formulas (usual mathematical operators were used). Filling out the table is automated using drop-down lists.

When creating a list (Data – Data Verification), we refer to the Directory created for income.

Expense accounting

The same techniques were used to fill out the report.

Gains and losses report

Most often, for management accounting purposes, the income statement is used rather than separate income and expense statements. This provision is not standardized. Therefore, each enterprise chooses independently.

The created report uses formulas, auto-completion of articles using drop-down lists (links to Directories) and data grouping to calculate results.

Analysis of the cafe property structure

The source of information for analysis is the Balance Sheet asset (sections 1 and 2).

To better perceive the information, let's make a diagram:

As the table and figure show, the main share in the property structure of the analyzed cafe is occupied by non-current assets.

Download an example of management accounting in Excel

The Balance sheet liability is analyzed using the same principle. These are the sources of resources through which the cafe operates.

Cost items

So we need a project budget, which consists of cost items. First, let’s create a list of these same cost items in Micfosoft Project 2016.

We will use custom fields for. We create a substitution table for a custom field of the Text type for the Resources table, for example, as in this figure (of course, you will have your own cost items, this list is just an example):

Rice. 1. Formation of a list of cost items

Working with custom fields was covered in the Project Management Tutorial in Microsoft Project 2016 (see section 5.1.2 Milestone). For convenience, the field can be renamed to Cost Items. After generating a list of cost items, they must be assigned to resources. To do this, add the Cost Items field to the Resources view and assign each resource its own cost item (see.

Management accounting in an enterprise: example of an Excel table

Rice. 2. Assigning cost items to resources

Microsoft Project 2016 features allow you to assign only one cost item per resource. This must be taken into account when creating a list of cost items. For example, if you create two cost items (1. Salary, 2. Social security contributions), then they cannot be assigned to one employee. Therefore, it is recommended to group cost items so that one item can be assigned to one resource. In our example, you can create one cost item - payroll.

To visualize the budget in terms of cost items and time periods, the Resource Usage view is well suited, which needs to be slightly modified as follows:

1. Create a grouping by cost item (see Microsoft Project 2016 Project Management Tutorial, Section 2.5 Using Groupings)

Rice. 3. Creating a grouping of Cost Items

2. On the left side of the view, instead of the Labor Costs field, display the Costs field.

3. In the right part of the view, instead of the Labor Costs field, display the Costs field (by clicking on the right side of the mouse):

Rice. 4. Select fields on the right side of the Resource Usage view

4. Set a convenient scale for the right side, for example, by month. To do this, right-click on the table header on the right side.

5. Project budget example

As a result of these simple steps, in Microsoft Project 2016 we obtain the project budget in the context of specified cost items and time periods. If necessary, you can detail each cost item down to specific resources and tasks by simply clicking on the triangle on the left side of the Resource Name field.

Rice. 6. Details of project costs

Project S-curve

To graphically display changes in costs over time, it is common to use a project cost curve. The shape of the cost curve is typical for most projects and resembles the letter S, which is why it is also called the S-curve of the project.

The S-curve shows the dependence of the amount of costs on the timing of the project. So, if work starts “As early as possible,” the S-curve shifts to the beginning of the project, and if work starts “As late as possible,” accordingly, to the end of the project.

Rice. 7. Project cost curve depending on task deadlines

By scheduling tasks “As early as possible” (this is set automatically in Microsoft Project 2016 when planning from the beginning of the project), we reduce the risks of missing deadlines, but at the same time it is necessary to understand the project’s financing schedule, otherwise there may be a cash gap on the project. Those. the costs of our tasks will exceed the available financial resources, which poses the risk of stopping work on the project.

By scheduling tasks “As late as possible” (this is set automatically in Microsoft Project 2016 when planning from the end of the project), we expose the project to greater risks of missing deadlines.

Based on this, the manager must find a “golden mean”, in other words, a certain balance between the risks of missing deadlines and the risks of the project’s cash gap.

Rice. 8. Project cost curve in MS-Excel by downloading information from MS-Project

Drawing up an enterprise budget in Excel, taking into account discounts

The budget for the next year is formed taking into account the functioning of the enterprise: sales, purchasing, production, storage, accounting, etc. Budget planning is a long and complex process, because it involves most operating environment of organizations.

For a clear example, let’s consider a distribution company and draw up a simple enterprise budget for it with an example in Excel (an example budget can be downloaded from the link below the article).

Management accounting in an enterprise using Excel tables

In your budget, you can plan expenses for bonus discounts for customers. It allows you to model various loyalty programs and at the same time control costs.

Data for budgeting income and expenses

Our company serves about 80 clients. The range of goods is about 120 items in the price list. She makes a markup on goods of 15% of their cost and thus sets the selling price. Such a low markup is economically justified by intense competition and is justified by the large turnover (as in many other distribution enterprises).

A bonus reward system is offered to clients. Discount percentage on purchases for large customers and resellers.

Conditions and size interest rate The bonus system is determined by two parameters:

1. Quantitative limit. The quantity of a specific product purchased that gives the customer the opportunity to receive a certain discount.
2. Percentage discount. The size of the discount is a percentage that is calculated from the amount the client purchased when overcoming the quantitative limit (bar). The size of the discount depends on the size of the quantitative limit. The more goods purchased, the greater the discount.

In the annual budget, bonuses belong to the “sales planning” section, so they affect an important indicator of the company - margin (profit indicator as a percentage of total income). Therefore, an important task is the ability to set several bonus options with different boundaries at sales levels and the corresponding % bonuses. It is necessary that the margin be kept within certain limits (for example, not less than 7% or 8%, because this is the company’s profit). And customers will be able to choose several options for bonus discounts.

Our budget model with bonuses will be quite simple, but effective. But first, let’s draw up a report on the movement of funds for a specific client to determine whether it is possible to give him discounts. Pay attention to formulas that reference another sheet before calculating the percentage discount in Excel.

Drawing up enterprise budgets in Excel taking into account loyalty

The budget project in Excel consists of two sheets:

1. Sales – contains the history of the movement of funds over the past year for a specific client.
2. Results – contains the conditions for calculating bonuses and a simple account of the distributor’s performance, which determines the forecast of the client’s attractiveness indicators for the company.

Cash flow by clients

The structure of the table “Sales for 2015 by client:” on the “sales” sheet:

Enterprise budget model

On the second sheet we set the boundaries for achieving bonuses and the corresponding discount percentages.

The following table is a basic form of an income and expense budget in Excel showing the firm's overall financial performance for an annual period.

Structure of the table “Conditions of the bonus system” on the “results” sheet:

1. Bonus bar border 1. Place to set the level of the border bar by quantity.
2. Bonus % 1. Place to set a discount when crossing the first border. How is the discount for the first border calculated? Clearly visible on the “sales” sheet. Using the function =IF(Quantity > limit of 1 bonus bar[quantity]; Sales volume * percentage of 1 bonus discount; 0).
3. Bonus bar limit 2. A higher limit compared to the previous limit, which makes it possible to get a larger discount.
4. Bonus % 2 – discount for the second border. Calculated using the function =IF(Quantity > limit 2 of the bonus bar [quantity]; Sales volume * percentage of 2 bonus discount; 0).

Structure of the table “General report on the company’s turnover” on the “results” sheet:

Ready-made enterprise budget template in Excel

And so we have a ready-made enterprise budget model in Excel, which is dynamic. If the bonus limit is at the level of 200, and the bonus discount is 3%. This means that last year the client purchased 200 items. And at the end of the year he will receive a bonus discount of 3% of the cost. And if a client purchased 400 pieces of a certain product, it means that he has crossed the second limit of bonuses and already receives a 6% discount.

Under such conditions, the “Margin 2” indicator will change, that is, the distributor’s net profit!

The task of the head of a distribution company is to select the most optimal levels of boundary strips to provide discounts to customers. You need to choose so that the “Margin 2” indicator is at least within the range of 7% -8%.

Download the enterprise budget-bonus (sample in Excel).

In order not to search for the best solution at random, and to avoid making mistakes, we recommend reading the following article. It describes how to make a simple and effective tool in Excel: Data table in Excel and matrix of numbers. Using the “data table” you can automatically visualize the most optimal conditions for the client and distributor.

Management reporting is one of the most important sources of obtaining information about the company’s performance, based on a set 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 timely identify the reasons for possible deviations from the parameters set by the business strategy, as well as show reserves (financial, material, labor, etc.) that have not been used by the company until this time. The process of setting up and implementing management reporting can be divided into 7 stages.

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

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

Step 2. Creating a management reporting methodology

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

Goals and objectives solved as a result of the implementation 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;
• Increasing the performance monitoring system;
• Ensuring transparency of cash flows;
• Strengthening payment discipline;
• Development of an employee motivation system;
• Prompt response to changes: market conditions, sales channels, etc.;
• Identification of the company's internal resources;
• 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:

• Cash flow statement (direct method);
• Cash flow statement (indirect method);
• Gains and losses report;
• Forecast balance (managerial balance);

Consolidation of budgets

The preparation of consolidated management reporting is a rather labor-intensive 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 consists of companies that are not connected with 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 not everything is so obvious, because it will be necessary to exclude mutual transactions so as not to distort the data on income and expenses, assets and liabilities at the holding level in the consolidated statements. The company's budget policy needs to consolidate the rules and principles for eliminating VGOs.

For this, it is more advisable to use specialized information systems, for example, “WA: Financier”. The system allows you to eliminate intra-company turnover at the level of processing 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, the reconciliation of intragroup turnover, their elimination, the execution of corrective entries and other operations are carried out automatically.

Example: Company A owns Company B 100%. Company A sold goods for the amount of 1,500 rubles. The purchase of this product cost company A 1000 rubles. Company B paid for the goods delivered in full. At the end of the reporting period, Company B did not sell the product, and it is included in its reporting.

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 inventories (500 rubles). To exclude VGOs and profits that Company B has not yet earned. Adjustments need to be made.

Result of management reporting consolidation

Determination of key performance indicators (KPI – Key performance indicators)

The introduction of key control indicators allows you to manage financial responsibility centers by setting limits, standard values ​​or maximum boundaries of accepted indicators. The set of performance indicators for individual central financial districts significantly depends on the role of this center of responsibility in the management system and on the functions performed. The indicator values ​​are set taking into account strategic plans companies, development of individual business areas. The system of indicators can take on a hierarchical structure, both for the company as a whole, and with detail down to each center of financial responsibility. After detailing the top-level KPIs and transferring them to the levels of the Central Federal District and employees, staff remuneration, etc. can be linked to them.

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

Current control over budget execution involves regular monitoring of the activities of financial responsibility centers to identify deviations in the actual performance indicators from those planned. Conducted daily or weekly based on operational reporting.

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

In the process of executing budgets, it is important to identify deviations at the earliest stages. Determine what 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 the warehouse. This will allow you to avoid unnecessary expenses, prevent budget failure and take action in advance. Be sure to regulate control procedures. Create a separate budget control regulation. Describe in it the types and stages of inspections, their frequency, the procedure for revising budgets, key indicators and ranges of their deviations. This will make the control process transparent and understandable, and will increase executive discipline in the company.

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

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 relationships with each other, and the imposition of types of budgets on the organizational units 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 (FRCs) 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 - get an answer to the question of who and what budgets in the enterprise should be drawn up. A correctly constructed financial structure of an enterprise allows you to see the “key points” at which profits will be formed, taken into account and, most likely, redistributed, as well as control over the company’s expenses and income.

The Financial Responsibility Center (FRC) is an object of the company’s financial structure that is responsible for all financial results: revenue, profit (loss), costs. The ultimate goal of any central financial institution is to maximize profits. For each central financial district, all three main budgets are drawn up: a budget of income and expenses, a cash flow budget and a forecast balance (managerial balance sheet). As a rule, individual organizations act as central financial districts; subsidiaries of holdings; separate units, representative offices and branches of large companies; regionally or technologically isolated types of activities (businesses) of multi-industry companies.

Financial accounting center (FAC) is an object of the company’s financial structure that is responsible only for some financial indicators, for example, income and part of the costs. For the DFS, a budget of income and expenses or some private and functional budgets (labor budget, sales budget) are drawn up. The main ones can act as DFS production workshops participating in unified technological chains at enterprises with a sequential or continuous technological cycle; production (assembly) shops; sales services and divisions. Financial accounting centers may have a narrow focus:

• marginal profit center (profit center) - a structural unit or group of units whose activities are directly related to the implementation of one or more business projects of the company that ensure 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 include profit accounting (for example, a sales service);
• investment center (venture center) - a structural unit or group of units that are directly related to the organization of new business projects, profits from which are expected in the future.
• cost center is an object of the financial structure of an enterprise that is responsible only for expenses. And not for all expenses, but for the so-called regulated expenses, the expenditure and savings of which the management of the Central Bank can control. These are departments that serve the main business processes. Only some auxiliary budgets are drawn up for central planning. The auxiliary services of the enterprise (housekeeping department, security service, administration) can act as a central protection center. A cost center may also be referred to as a cost center (cost center).

STEP 4. Formation of a budget model.

There are no strict requirements for the development of a classifier of internal management reporting. Just as no two companies are exactly alike, no two budget structures are exactly alike. Unlike formalized financial statements: a profit and loss statement or a 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 by the company, the wishes of 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 company's daily activities.

Classification of articles using the example of the Cash Flow Statement.

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

Budget policy is formed with the aim of developing and consolidating the principles for the formation and consolidation of indicators for these items and methods for their assessment. This includes: determination of the time period, planning procedures, budget formats, action program of each of the participants in the process. After developing the budget model, it is necessary to move on to regulating the budget process.

It is necessary to determine which budgets are formed in the company and in what sequence. For each budget, it is necessary to identify a person responsible for preparation (a specific employee, a central federal district) and someone responsible for the execution of the budget (the head of a department, a head of a central federal district), and set limits, standard values ​​or maximum boundaries for the performance indicators of a central federal district. It is imperative to form a budget committee - this is a body created for the purpose of managing the budget process, monitoring its execution 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 with useful information about the company’s income and expenses. At the same time, you need to understand that the more levels of detail are allocated, the more time and labor costs will be required to draw up budgets and reports, but the more detailed analytics can be obtained.

It is also necessary to take into account that as a result of developing a management reporting methodology, adaptation of accounting systems may be required, because To analyze budget execution, planned indicators will have to be compared with available actual information.

Step 7. Automation.

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