Management reporting is the set of internal reports for the owner and managers: revenue, profit, cash, customer debts and progress against plan, monthly and by product, customer or location.
Unlike statutory accounts, it is not for the tax agency: the company chooses its format, and the aim is fast decisions, not a filing a year later.
Below: what management reporting is in plain terms, how it differs from financial accounting, what it includes, the main formats, an example monthly plan-versus-actual report, how to set it up step by step, and how it works in Spain, where bookkeeping is usually done by a gestoría.
What management reporting is in plain terms
It is a set of reports that show the owner how the business is doing and what to do next: where money is being lost, which product or customer brings profit, whether there will be enough cash next month, whether the plan is on track.
Management reports answer business questions, not tax ones: “why did revenue fall 10%”, “which location loses money”, “when will the cash run out”.
So what matters is speed and breakdowns — by product, customer, salesperson, location — rather than compliance with tax rules.
Management reporting vs financial accounting
| Financial (statutory) accounts | Management reporting | |
|---|---|---|
| For whom | Tax agency, Commercial Registry, banks, outside investors | Owner, managers, team |
| Mandatory | Yes, by law | No, the company decides |
| Format | Set by the General Accounting Plan (Plan General de Contabilidad) | Whatever helps decisions |
| When ready | Annual accounts months after year-end; tax returns quarterly | 5–10 days after month-end; cash every week |
| Breakdowns | The company as a whole | Products, customers, locations, projects, salespeople |
| What matters most | Accuracy under accounting rules | Speed and clarity |
In Spain, the directors of an SL must prepare the annual accounts (cuentas anuales) within three months of year-end, the shareholders’ meeting approves them within the first six months, and they are filed with the Commercial Registry within a month of approval.
That is too late to run a business on — which is why management reporting is needed.
Management reporting vs financial reporting: how the two connect
Financial reporting is the outward-facing set: the annual accounts that a Spanish SL prepares under the General Accounting Plan (Royal Decree 1514/2007) or its version for small and medium-sized companies (Royal Decree 1515/2007), and the consolidated accounts that groups listed on an EU stock exchange prepare under IFRS, as required by Regulation (EC) No 1606/2002.
The annual accounts comprise the balance sheet, the profit and loss account, the statement of changes in equity, the cash flow statement and the notes; a company that may prepare an abridged balance sheet is not required to prepare the cash flow statement.
Management reporting uses the same transactions but cuts them differently and sooner.
The two must reconcile: revenue and profit for the quarter in the management pack should match the bookkeeping, with the differences explained — accruals, documents the gestoría has not yet posted, one-off costs the management view shows separately.
If the numbers never reconcile, the owner stops trusting either of them.
Management accounting is the work behind the reports: allocating costs to products and locations, budgeting, calculating margins.
Management accounting reports — cost per unit, margin by product, budget variances — are the building blocks of the management pack.
What management reporting includes
The core is three reports, as in any financial model, but with management line items:
- Profit and loss (P&L) — revenue, cost of sales, expenses and profit for the month: did the company make money. How to read its lines is covered in Revenue, income, profit and EBITDA.
- Cash flow statement — how much cash came in and went out and how much is left: will there be enough next month. Rolled forward, it becomes the cash-flow calendar that shows a cash gap in advance.
- A simplified balance sheet — what the company has (cash, receivables, stock, equipment) and what it owes.
Then add what your business needs:
- plan versus actual against the budget, with variances;
- receivables and payables by age — who owes how much and how overdue;
- sales by product, customer, channel and salesperson;
- key performance indicators (KPIs) — margin, average order, utilisation, customer acquisition cost; for a startup, unit economics and burn rate and runway.
Management reporting formats
- Plan-versus-actual table — the main monthly format: plan, actual, variance in euros and percent, a comment.
- Dashboard — one page with the 5–10 main indicators and charts, for an owner who reads the report in five minutes.
- Segment report — the same profit, but by location, product or project: where you make money and where you lose it.
- Weekly cash summary — balances, receipts and payments for the coming weeks.
Management reporting pack: what goes in it
A management reporting pack — also called the management pack or the monthly management accounts — is the set of reports the owner or board receives together, in the same order every month. A typical pack for a small or mid-sized company:
| Report | What it shows | How often |
|---|---|---|
| Summary page | 5–10 key figures, what changed, decisions needed | Monthly |
| Profit and loss vs budget | Revenue, margins, costs and profit against plan and last year | Monthly |
| Cash position and forecast | Balance today, receipts and payments for the next 13 weeks | Weekly |
| Balance sheet | Cash, receivables, stock, debt, equity | Monthly |
| Receivables and payables by age | Who owes how much and how overdue; what the company owes and when | Weekly or monthly |
| Sales by segment | Revenue and margin by product, customer, channel, location | Monthly |
| Key indicators (KPIs) | Margin, average order, utilisation, customer acquisition cost, headcount | Monthly |
| Forecast to year-end | Latest estimate of revenue, profit and cash for the year | Quarterly |
| Commentary and actions | Causes of variances, decisions, who does what by when | Monthly |
For a company with turnover of a few million euros, 8–12 pages are enough.
Put the summary first: whoever reads only one page should still know whether the month was good and what needs deciding.
Management report format: a template for each page
Whatever the report, each page of the pack follows one format, so readers know where to look:
- Headline — the conclusion in one sentence: “Revenue 10% below plan; cash €14,000 short because customers paid late”.
- Numbers — actual, plan, variance in euros and percent, the same month last year.
- Chart — one, showing the trend over the last 12 months.
- Comment — the cause of each significant variance, not a retelling of the table.
- Action — what will be done, by whom and by when.
Set a threshold for comments — for example, variances above 5% or €2,000 — so the commentary covers what matters rather than every line.
Management level reporting: who gets what
The same data serves different levels of management, and each needs its own cut and frequency:
| Level | What they need | Format | How often |
|---|---|---|---|
| Owner, board, investors | Profit, cash, plan vs actual, forecast, main risks | Summary page and full pack | Monthly; board meetings quarterly |
| General manager, finance | Everything in the pack plus the detail behind each variance | Full pack, cash forecast | Weekly and monthly |
| Heads of sales, operations, locations | Their own revenue, costs, margin and KPIs | Segment report, dashboard | Weekly or monthly |
| Team | Two or three indicators they can influence | Dashboard | Daily or weekly |
Reporting to the level above is shorter than reporting to the level below: the board sees ten lines and the causes, the head of a location sees every cost of that location.
A management report example: one month, plan vs actual
An illustrative SL distributor, monthly report:
| Line | Plan | Actual | Variance |
|---|---|---|---|
| Revenue | €60,000 | €54,000 | −€6,000 (−10%) |
| Cost of sales | €36,000 | €32,400 | −€3,600 |
| Gross profit | €24,000 | €21,600 | −€2,400 |
| Salaries and contributions | €12,000 | €12,000 | €0 |
| Rent and other costs | €5,000 | €5,600 | +€600 |
| EBITDA | €7,000 | €4,000 | −€3,000 |
| Receivables at month-end | €120,000 | €131,000 | +€11,000 |
| Cash at month-end | €45,000 | €31,000 | −€14,000 |
What the owner sees: revenue is 10% below plan, and cash is €14,000 short — €3,000 from lower profit and €11,000 because customers paid later.
Decisions: find which customers’ sales fell, and chase overdue debts — they ate the cash, not the costs.
How to set up management reporting, step by step
- Decide who makes which decisions from the report. The owner needs cash and profit; the head of sales needs sales by customer and salesperson.
- Define management line items for income and costs — 15–30 lines that make sense without an accountant — and the breakdowns to track.
- Identify data sources: bookkeeping, bank statements, CRM, till, stock.
- Set a deadline and an owner: for example, the monthly report by the 10th, the cash summary every Monday.
- Compare against the budget. A report without a plan shows what happened but not whether it was good or bad. How to build the budget is covered in the financial model series.
- Review the variances and record the decisions: a report that changes nothing is not needed.
Management reporting in Spain: bookkeeping at a gestoría
In Spain, small companies usually outsource bookkeeping to a gestoría or asesoría. That works for taxes but has two limits for management:
- Data arrives late — a gestoría often posts documents once a quarter, in time for the VAT returns.
- Line items are tax-driven, not managerial — costs are grouped by chart-of-accounts codes, not by product, location or project.
So management accounts are usually kept in parallel: from bank statements, the CRM and the invoicing software, weekly or monthly, and reconciled with the bookkeeping each quarter.
Excel or Google Sheets is enough for this; as the business grows, cloud accounting software with bank feeds takes over.
Common mistakes
- Reports built only from bookkeeping — they arrive late and without the breakdowns you need.
- No plan — nothing to measure the month against.
- Too many indicators — 40 lines nobody reads instead of 10 that drive decisions.
- Profit without cash — the company “makes money” but cannot pay, because the cash is in receivables and stock.
- Reporting for its own sake — variances are not reviewed and decisions are not recorded.
Frequently asked questions
What is management reporting in simple terms?
Internal reports for the owner and managers: how much the company earned, how much cash it has, who owes it money and whether the plan is on track. The company chooses the format, and the aim is to make decisions quickly.
What does management reporting include?
The core is a profit and loss account, a cash flow statement and a simplified balance sheet. Added to them are plan versus actual against the budget, receivables and payables, sales breakdowns and the business’s key indicators.
What is the difference between management reporting and financial accounting?
Financial accounts are required by law, prepared under accounting rules for the tax agency and the registry, and ready months later. Management reporting is voluntary, kept in whatever format suits the owner, and ready a few days after month-end.
What formats does management reporting take?
A plan-versus-actual table with variances, a one-page dashboard of the main indicators, segment reports by product, customer or location, and a weekly cash summary.
How often should management reports be prepared?
Cash every week; profit and plan versus actual every month, within 5–10 days of month-end. Once a quarter, reconcile with the bookkeeping and review the budget.
Who prepares management reports?
A finance director or finance manager; in a small company, the owner or an outside consultant. The data comes from bookkeeping, the bank, the CRM and stock records.
Is management reporting mandatory in Spain?
No. Bookkeeping, tax returns and annual accounts for the Commercial Registry are mandatory. Management reporting is something the company keeps for itself.
Can management reporting be done in Excel?
Yes. For a small company, Excel or Google Sheets is enough: line items, plan, actual and variances on one sheet, weekly cash on another. As the business grows, accounting software with bank feeds takes over.
What is a management reporting pack?
A set of reports the owner or board receives together every month: a summary page, profit and loss against budget, cash and its forecast, the balance sheet, receivables and payables, sales by segment, key indicators, and commentary with decisions.
What format should a report to management follow?
A headline with the conclusion, the numbers — actual, plan, variance and last year — one chart with the trend, a comment on the causes of significant variances, and the action with an owner and a deadline.
What are management accounting reports?
Internal reports built with management accounting methods: cost and margin by product, customer or location, budget variances, cost per unit. They make up most of the management reporting pack.
Key points about management reporting
- Management reporting is internal reporting for decisions, not for the tax agency.
- The core is P&L, cash flow and a simplified balance sheet, plus plan versus actual and key indicators.
- What matters is speed and breakdowns: the monthly report within 5–10 days, cash every week.
- In Spain, a gestoría provides a delayed tax view, so management accounts are kept in parallel.
- A report is only useful if variances lead to decisions.
Sources
- Royal Legislative Decree 1/2010, Capital Companies Act, arts. 164, 253 and 279 — BOE.
- Royal Decree 1515/2007, General Accounting Plan for small and medium-sized companies — BOE.
- Regulation (EC) No 1606/2002 on the application of international accounting standards — EUR-Lex.
- Royal Decree 1514/2007, Plan General de Contabilidad — BOE.
