Financial and Management reports are the keys to your business’ success, but if you expect to rely on just one person to handle the reporting for your large business, you may need to rethink your approach. While some may think reporting is just about calculating numbers, management reports and financial reports contain a number of differences in content and the generation process. Before hiring a specialist, it is important to understand the differences in the two types of reporting.
What is Financial Reporting?
Financial reporting is the process of providing financial information to company stakeholders in order to influence business goals. This process includes three important aspects: the cash flow, the profitability and the value of assets. The accountant tasked with preparing these reports must have an understanding of the variety of statements and the accounting standards required. The several different types of financial management and reporting are:
- Profit and Loss Statements
- Balance Sheets
- Accounts that are to be paid
- Accounts from where funds are coming in
- Statement of transactions
It is imperative that financial reporting is done accurately by a sharp and dilligent professional.
What is Management Reporting?
Management reporting is key to a company’s operation and performance. Management accountants send monthly management reports to the CEO. These inform stakeholders who in turn can better make decisions about the company’s profit points, performance, and tactical steps to benefit the company as a whole. The monthly reports that are sent to the management outline the company’s overall performance in the fiscal year.
It is important that management reporting is done by a critical thinker to produce the best results.
The Difference Between Financial and Management Reporting
Accountants, who handle the financial and management reporting, act as advisors for their companies on a daily basis. Companies often look to hire a single person who can do both, but this is unadvisable due to the differences in reporting, as summarized below.
- External reports that require certain standards and guidelines to be followed.
- Demonstrates the company’s overall performance.
- Looks back on the company’s performance over the past year.
- Internal reports, including information regarding banks, investors and CEOs. Flexible guidelines.
- Demonstrates the companys reports for segments.
- Looks forward and helps maintain the company’s future.
If you are looking for a specialist in either management reporting or financial reporting, we have the perfect solution for you. Get in touch with NuVest Management Services to find our more.