Every month, in businesses of every size, someone spends two days preparing a report that the owner reads for two minutes. The numbers are right. The formatting is careful. And nothing changes as a result.
When I review a company's MIS, I rarely find errors in the arithmetic. What I find is a report built to show that work was done, instead of a report built to help someone decide. The difference sounds small. In practice it decides whether finance is a cost centre or a steering wheel.
Before anyone opens a spreadsheet or buys dashboard software, I ask three questions. They take an hour to answer properly, and they save months of reporting that nobody uses.
1. What decision is this report for?
Every line in a management report should connect to a decision someone can actually take. Revenue by product line matters if someone can change the product mix. Debtor ageing matters if someone will call the customer on Monday. A number that connects to no decision is trivia, however accurate it is.
The test is simple. For each line, write the name of the decision next to it. If you cannot, remove the line or move it to a supporting schedule. Most reports shrink by half, and become far more useful.
A dashboard with forty numbers is a list. A dashboard with four numbers is a decision.
2. What would make us act differently?
A number on its own says very little. Gross margin of 31 per cent is neither good nor bad until you know what you expected and what you would do if it were 27. So for each important line, agree a trigger in advance: the level at which someone must look closer, and the level at which someone must act.
Triggers turn a report from a description into an alarm system. They also remove a great deal of argument, because the conversation moves from whether a number is worrying to what we agreed to do when it reached this level.
3. Who owns the number?
A figure that belongs to everyone belongs to no one. Each line in the report needs a named owner: the person who explains it, who answers for it in the review meeting, and who acts when it crosses its trigger. The owner is not always the person who prepares it. Accounts can compile the debtor ageing, but the sales head owns collections.
Ownership is where most reporting systems quietly fail. Without it, the review meeting becomes a reading session. With it, the meeting becomes a short list of commitments.
Putting it together: a one-page test
Here is the format I use to test an existing report. The rows are illustrative, not drawn from any client.
| Report line | Decision it supports | Look closer at | Act at | Owner |
|---|---|---|---|---|
| Debtors over 90 days | Hold supplies, escalate, or provide | Above 10% of debtors | Above 15% | Sales head |
| Gross margin by product | Re-price or change the mix | 2 points below budget | 4 points below | Business head |
| Cash runway | Draw on limits, defer capex | Below 90 days | Below 60 days | Finance head |
| Statutory dues pending | Pay now or plan the cash | Any item due in 7 days | Any item overdue | Accounts lead |
If a line in your current report cannot fill all five columns, it is a candidate for removal. If a decision you care about has no line, it is a candidate for addition.
What changes when MIS works
The report gets shorter. The meeting gets shorter too, and ends with actions instead of observations. Preparation time drops because people stop polishing numbers nobody uses. And once the report is organised around decisions, it becomes much easier to automate, because you know exactly which numbers matter and when.
None of this needs expensive software. It needs an hour of honest conversation before the first cell is filled. Start with the three questions. The dashboard can come later.
About the author
Satvik Shah is a Chartered Accountant (2006) and a promoter director of JS Assignments Private Limited, where he leads virtual CFO, MIS and process-automation work for owner-managed businesses. He holds the DISA and DIRM qualifications and an MBA in Insurance and Financial Planning. More about Satvik · Get in touch
General commentary for educational purposes. It is not advice for any specific business or situation.