Article
A one-page management report: an example the board reads in ten minutes
Management reporting usually fails not for lack of data but because there is too much of it. Here is the layout of a one-page monthly report on the model company: five blocks, one decision at the top and numbers that always reconcile to the ledger.
Author: Tomasz FordymackiPublished:
The five blocks of one page
- 11. Decision of the monthOne sentence at the top: what the board has to decide today and which number stands behind it. Example: “Cut payment terms for segment C from 90 to 60 days: releases PLN 0.5m of cash by quarter end”.
- 22. Result against budget and last yearRevenue, contribution margin, shared costs, EBITDA: month and year to date, with the variance in currency and per cent. Without twenty lines of the P&L.
- 33. Margin by segmentFirst- and second-level contribution margin for each segment (client, product, department), with shared costs below the line, allocated by an explicit key or not at all.
- 44. Cash for thirteen weeksBalance today, the lowest week in the horizon and available facilities. The only forward-looking block, and usually the most important.
- 55. Two indicators getting worseNot ten green tiles, but two numbers with a six-month trend, for example receivable days and inventory days.
Example: September in the model company
| Item (PLN m) | September | Budget | Variance |
|---|---|---|---|
| Revenue | 2,63 | 2,75 | −0,12 |
| Contribution margin I | 0,69 | 0,74 | −0,05 |
| Segment fixed costs | 0,35 | 0,35 | 0,00 |
| Contribution margin II | 0,34 | 0,39 | −0,05 |
| Shared costs | 0,06 | 0,06 | 0,00 |
| EBITDA | 0,28 | 0,33 | −0,05 |
The whole gap to budget sits in contribution margin I: revenue 0.12m lower at a margin of about 40 % on the missing sales. Fixed costs are on plan. So the report says the problem is sales, not costs, and that one sentence saves the board an hour of debate about cuts.
Frequently asked questions
What should a management report contain?
A decision to take, the result against budget and last year, margin by segment, a cash forecast and two or three operating indicators with a trend. All on one page, with company-wide definitions and the ability to drill down to the journal entry.
How does a management report differ from financial statements?
Financial statements are for authorities, banks and the register: once a year, under accounting law, in a by-nature or by-function layout. A management report is for the board: monthly, in a layout that shows where the company makes money, that is by segment and contribution margin.
How often should a management report be prepared?
Result and segments monthly, at the latest ten working days after close. Cash weekly, because a thirteen-week forecast ages faster than the P&L. A company under liquidity pressure needs the cash block even more often.
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