Management reporting systems, as the phrase suggests, captures all data by a company’s manager in order to run the business. For the smooth running of a business, data needs to be collected by using a management reporting system, especially the financial annual data reports. On the contrary, active management systems store very detailed data in a different way to what is presented to the public.
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Collected revenues, profit or expenses may not be the only financial parameters used in management reporting systems. In most high-profile companies, the above factors are also used for tracking variables that are nonfinancial in nature like employee headcount, assets of clients in custody, total new money that clients deposit or withdraw and even the investment performance of the assets that belong to a client.
- Users and Designers of such Systems
People who design management reporting systems are usually controllers and financial officers. They not only design but also implement, maintain, and carry out adjustments to such systems. They are charged with the responsibility of carrying out analysis after monitoring in order to recommend the appropriate course of action to managers. Such financial officers work hand in hand with the management staff and information technology personnel to develop and maintain such reporting systems.
- Difference between Desktop and Mainframe
In addition to the desktop computing system and the built-in excel spreadsheets, there is the running on personal computers which are all used in the construction and maintenance of the management reporting system compared to the programmed one found in mainframe applications. Both small and large companies use desktop computing because of its relatively lower cost of development and maintenance compared to the mainframe applications. It is also flexible when it comes to alterations of the computational algorithm and formats for reporting.
- Difference between Automation and Manual Processes
The management reporting systems mostly depend on the manual processes and are far from being fully automated. For instance, most reports taken to the managers are usually the data spreadsheets populated and formatted manually by relevant workers. We can therefore conclude that management reporting systems are indeed processes and not necessarily information systems.
- Management Reporting Applications.
In order to evaluate the performance of organisations, managers and even lower level employees, most often used are management reporting systems. The reports from such evaluations may be used to determine compensation. For example, the bonus which needs to be given to the head of a business unit may be determined by the value ascribed to such a unit by the reporting system. This may also be applicable to the product manager on condition that the product profitability measurement system is well developed.
- Development of the Management Reporting Systems Challenges
Lack of detailed information from the data often becomes a problem when compiling and completing a company’s annual report. Some of the forms required such as Form 10-K, Corporate tax returns or Form 10-Q may also lack vital information for accurate evaluation. Challenges also arise if such forms are not presented in the correct format.
- Vital Issues of Analysis
Some of the challenges facing the process of analysis include the pricing methodologies used in the internal transfers and corporate overheads attributed to clients or at times individual products. Lack of aggregation of changes in the assets of clients may also affect analysis.
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