What a monthly management report should contain, and in what order
A monthly report sent to management is often read only as far as the first page. If that page does not say how the month went against plan and what needs deciding, the rest of the report goes largely unused.
Page one: results against plan, and the decisions needed
Page one should tell the reader, inside a minute, how revenue, profit and cash did against budget this month. In the example August revenue is THB 10.921m, 4.51% below budget; net profit is 1.648m against a 1.945m budget; month-end cash is 30.634m.
Under the numbers, list the one to three issues to discuss and say what is needed from the meeting: an approval, a choice between two options, or acknowledgement of a risk.
The Executive Review in this set is built to be that page.
Every figure needs a comparison
A figure with nothing beside it leaves the reader to work out whether it is good. Put actual next to budget and, where available, the full-year forecast or the same month last year.
Show variances as both an amount and a percentage, and make it plain which lines are favourable and which are not. Reading the sign is covered in the budget variance article.
Keep the month, year to date and full-year forecast in separate columns. Nobody should have to guess which period a number covers.
Explain the cause; do not read the table back
A sentence that only says revenue missed budget by some percentage is the table read aloud. A useful explanation says what caused it and where the evidence comes from.
In the example every product sold at budget price, so the revenue shortfall is volume. A good explanation goes on to say which products sold below plan and whether sales has confirmed why.
If the cause is not known yet, say so, and name who will find out and by when. That is better than an explanation nobody has checked.
Close each issue with an action
Each issue should end with three things: the action, the owner and the follow-up date. Next month's report opens by reviewing that list.
An issue that stays open month after month usually means the owner lacks the authority to fix it, or the problem is bigger than first thought. Bring it back to the table.
Detail goes at the back
Line-by-line, department and product tables belong at the back or in separate supporting reports. Anyone tracing a figure can find them; anyone reading page one does not have to wade through them first.
In this set the detail is split into reports 02 to 07, each answering one question, such as where profit departed from plan or where cash is tied up.
Before sending, open the workbook's checks sheet. If any line fails, do not send it yet.
Common questions
How long should a monthly management report be?
There is no fixed page count. The test is that page one, read on its own, tells the reader the result and the decisions needed; the rest is detail for whoever has to trace a figure. If page one only makes sense after turning to another page, it is not doing its job.
Compare with budget or with last year?
Budget shows whether the business is on plan; last year shows whether it is actually growing. They answer different questions. With room for only one, most companies choose budget, because it is the number everyone agreed to.
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Figures in the articles are synthetic sample data, used to show the method. They are not a real company's results.
