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How can I improve my management information?

How can I improve my management information?
Sean Hackemann
Sean Hackemann
Chartered Accountant and Business Adviser
Specialist Accounting Solutions Ltd
 

Posted: Wed 14th Sep 2022

The more you know about your business, the more likely you are to make good decisions. This is especially true when it comes to your finances, but it’s also important in boosting your employee morale and customer satisfaction.

Here’s why you should focus on management information, and how you can improve it.

What is management information?

Management information refers to any data that helps a manager to make decisions. When it comes to finances, this data usually takes the form of financial metrics to gauge a company’s performance. Common metrics include:

  • Revenue

  • Gross profit and gross profit margins

  • Sales growth

  • EBITDA (Earnings Before Interest, Tax, Depreciation and Amortisation)

There are also metrics which measure non-financial wellbeing. These are often called qualitative metrics, and they include employee retention, customer satisfaction and your company’s reputation.

By combining these with financial metrics, you can get a more rounded view of how your business is doing.

Why is management information important?

Running a business is all about decision-making. Management teams make choices that will impact the entire future of their company, and this is why it’s vital to have good information.

Taking a data-driven approach to management has all kinds of benefits:

  • You can spot problems at an earlier stage and rectify them before it's too late

  • You can set realistic goals based on up-to-date information

  • You can see the effects of your decisions reflected in the data, allowing you to change course if things aren’t working

  • Gathering detailed information shows your employees that you are engaged with the day-to-day running of the business

  • You will gain a more accurate understanding of your employees and their roles, making you a better people manager

You can also use management information to create KPIs (key performance indicators). These are targeted goals, usually related to a specific metric.

An example KPI would be challenging your team to achieve a 5% increase in sales revenue by the end of the quarter. When used correctly, KPIs can be a great motivational tool.

How can I improve management information?

Managers have access to a huge supply of information. The challenge is picking out useful data from the background noise. There are a number of ways that you can make this easier:

Invest in automated accounting software

This will make a huge difference to both the accuracy and the accessibility of your data. Most accounting software packages have a targeted search feature, letting you find the information you need in a matter of seconds.

Make use of your accounting software’s reporting tool

Automated accounting software can generate detailed reports based on the metrics of your choice. This allows you to remain flexible, rather than waiting until the end of your normal accounting period to evaluate your progress.

Talk to your team

This may seem obvious, but some of the most useful information can be gained simply by asking. Your staff may be better placed than you are to flag up problems and suggest possible solutions.

You could schedule a regular team meeting where you open up the floor to employees or create an online suggestion box for employees who wish to remain anonymous.

Gather customer feedback

New technology has made it easier than ever to find out what your customers think of your service. Pay attention to online reviews and consider sending out a customer satisfaction survey.

You can increase the number of responses by offering an incentive to those who participate. Also, try to update customers on the ways in which you are responding to their feedback. This will make them more likely to participate in future surveys.

Relevant resources


Connect with Sean on Enterprise Nation today for more business support.

 
Sean Hackemann
Sean Hackemann
Chartered Accountant and Business Adviser
Specialist Accounting Solutions Ltd
 
Need a one-stop shop for your accounting needs? Looking for better management information to help make better business decisions and thereby grow your company? Book a no-obligation 1:1 accountancy clinic with us to find out how we can help you. We are regulated by the ICAEW and are part of their trusted Business Advisory Service. Our specialist areas are Advisory and Financial Outsourcing (full/pt) but we also offer the usual services around tax, compliance etc. 
 

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