Management reporting: what it includes, formats and an example

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

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.

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.

A management report example: one month, plan vs actual

An illustrative SL distributor, monthly report:

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

1. Decide who makes which decisions from the report. The owner needs cash and profit; the head of sales needs sales by customer and salesperson.
2. Define management line items for income and costs — 15–30 lines that make sense without an accountant — and the breakdowns to track.
3. Identify data sources: bookkeeping, bank statements, CRM, till, stock.
4. Set a deadline and an owner: for example, the monthly report by the 10th, the cash summary every Monday.
5. 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.
6. 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.

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 1514/2007, Plan General de Contabilidad — BOE.