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In today’s episode of ‘From the eLearning Trenches,’ we ask one of our learners “What client management reports are developed and reviewed by your firm on a consistent basis? What role do you play in this process? What could be improved?”

We provide to all of our client’s month-end management reports. Depending the size and complexity of the business will drive the volume and format of the reports. At a minimum we include:

  1. Dashboard/commentary on the results for the month and projected year end results. This gives the client a snapshot of what’s happened since the last reporting period (usually monthly). It highlights areas of concern and where focus needs to be directed to.
  2. Profit & Loss – usually at a more detailed level comparing the results to budget (or rolling forecast).
  3. Balance sheet – with movement from the prior period
  4. Forecast for the full year
  5. Aged receivables & payables
  6. Employee leave reports
  7. Other ad-hoc reports depending on the client ie. depreciation schedule if they have fixed assets

 My role is to review the reports prepared by my team for accuracy, to make sure the ‘story’ we are giving the client makes sense and adds value. I then use these reports as the basis of our monthly meetings with the client. We run through the reports, at a high level and as mentioned, discuss any areas of concern and try and address any questions that the client has or potentially may be asked by the Board (if relevant).

Over time we have developed different report packs for different clients. Our aim is to streamline this so that most clients (there may be some exceptions) receive similar report packs. This will not only make the month end process more efficient, this will also allow any team to pick up the client and be able to prepare reports because they are consistent across clients.

Expert feedback

This example from a learner describes a typical suite of monthly financial reports that can be easily developed using information at hand. The challenge then becomes how to best add value through analysis and discussion with the client, especially in relation to general business health a profit, cashflow and value level.

It’s also important to know what’s useful for the client. Where do they want to take their business? What are the key financial (and non-financial) indicators that will help them monitor progress?

Most typical accounting firms may struggle to find business clients that require monthly management reports. A good place to start is with quarterly reports using financial information at hand. Even some basic performance indicators that describe  trends can be useful in initiating a conversation about what’s working and what can be improved in the client’s business.

The keys to cost-effective management reporting are (a) ensure that the client collects and reconciles required information on regular basis and (b) leverage the development of financial reports within the firm. If a partner is doing all the work, it will be exceedingly difficult to charge time to WIP.

This assessment task and response is taken from the Virtual CFO Advanced eLearning Course. Click here to find out more

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