On the 26th day of December of 2018, the government has made some Amendments to the existing FD...
In every company, the management needs information to arrive at decisions and evaluate the company’s performance in order to effectively run its business. This required information may be made available to the management via reports. Reports can be defined as a means of communicating facts, usually in the written form, that should be brought to the attention of the different levels of management to enable them to take appropriate actions for proper control.
Management Information System (MIS) is essentially a reporting mechanism for monitoring the ‘mission’ of an organization in terms of objectives set out and evolved by the organization with formal planning.
A strong management reporting system is a prerequisite to produce timely and reliable information to make high-quality business decisions about the company’s future. Insight gathered through MIS reporting allows for deeper analysis to understand issues, provides accurate comparisons with competitors, and implements ‘controls’ to hold employees accountable for budgets. It identifies the source of a business problem, so you can begin working towards a solution.
The scope of MIS reports is wide and could range from a variety of data such as financial analysis, employees’ headcount, clients or customers, accounts, products, client assets in custody, investment performance, etc.
Reports are prepared for each executive right from the bottom up to the highest level of management, taking into account their status and responsibilities in the organization. With these reports, they can get timely information on the performance of people working under them as well as for the organization as a whole.
Some of the reasons as to why an enterprise needs an effective management reporting system in place are:
Management reporting systems help in capturing data that is needed by managers to run an effective business.
An effective management reporting system assists in the following:
Routine reports are periodically rendered. The intervals at which routine reports are to be submitted should be pre-set for each report. For instance, production reports should be rendered at shorter intervals because delayed production monitoring can result in a continued loss for a longer period of time. Manufacturing losses should be noted as soon as possible so that corrective measures can be taken to eliminate losses.
A few matters may be covered by special reports before they are presented to the management. After investigating the problem which requires a thorough scrutinization, special reports shall be submitted. For instance, special reports may be needed to address the following business problems:
Information may be presented to the management in either verbal (or oral) form or written form. Group meetings, seminars, conferences or interviews can be arranged where the company’s staff from different levels can meet to discuss and exchange ideas.
Nevertheless, the most common form of management reporting is where the data takes the form of a written report.
There are several key elements in a successful reporting process for the management. Implementing an effective MIS reporting programme involves the following:
Step 1: Discovery: The first step is to effectively communicate the vision behind this exercise across the organization and to the appropriate stakeholders. Identify and access the available data sources to suit your specific needs.
Step 2: Data accuracy: It should begin with an accurate and healthy data to support core business strategies. Data should support both the long-term and short-term visions of the company and should be trustworthy and from a reliable source. For instance, if data is not deleted for a discontinued product, the remaining data pool and the final reporting information will be negatively skewed.
Step 3: Analysis: Understand the amount of commitment involved in generating each report. Develop definitions of data to ensure that everybody interprets it the same way. Prioritize your information, understand what the data says, and further try to encourage quick decision-making abilities of the recipient.
Step 4: Report creation and delivery: Creating the reports and determining the appropriate method of data delivery is the next step. Pay close attention to the specific needs of your users whilst formatting and reporting.
Step 5: Implementation: Develop each report separately and create a process of governance to ensure data safety across the company. Define the requirements for access control, detailing who should have access rights to the information generated. One can minimize work by leveraging an implemented software to create repeatable processes and automate report jobs for predetermined periods of time.
Step 6: Access point: Build a convenient place to access data for users, such as a web portal or SharePoint platform.
Step 7: Feedback: Collect comments and suggestions from the stakeholders, including the management, to discover ways to continuously improve the processes and to ameliorate any pitfalls in business functions.
Step 8: In-house IT capabilities: Lastly, ensure that the personnel of in-house Information Technology (IT) department can handle the requisite systems and issues if they occur.
A good MIS report will help the management to take the requisite actions which are expected to improve the organization’s performance. For making a report that is trustworthy and easily comprehensible, certain general principles need to be followed while reporting.
These are enlisted below: