Management reporting is a difficult task, and therefore the author of this report must have special skills for this work. He must be a financial analyst, and as such must be well trained in accounting, finance and management. He must be able to do the analysis objectively, putting his ideas carefully and clearly, and convey the results in a readable form for effective action.

For effective accountability, the following steps should be followed:

• Reporting requires detailed planning of the flow of paperwork and its analysis. This should be a logical result of accounting transactions.
• Duplicate work should be avoided. Accounts should be designed to obtain "control data" without further analysis.
• Codification and mechanization should be used to process accounting data. They will help speed up reports.
• Accounting records must be closed ahead of time. This will make it easier to prepare reports over time.
• If actual data is not available, certain estimates can be used in their place to avoid unnecessary delays. However, the actual may be compared with an estimate of a later date, and deviations, if any, can be detected and analyzed. Such an analysis of deviations will help to make better estimates in the future.

Usefulness of reporting to management:

The reporting system allows management to understand the operation of the enterprise. When a particular reporting system does not meet the requirements, it is either lacking or tailored to needs. Thus, it is in a state of constant development.

A good reporting system is a convenient management tool to identify areas of weakness and any adverse or unusual phenomena. Employees are under constant control, and management is free to devote itself fully to policy development and future development.

The reports relate to forecasting the conditions under which planned operations will be carried out. This applies to budget estimates for product lines and forecasting of business conditions in general.

The reports also serve as a useful basis for the adoption of operating policies, sales or production, inventory policies, quality production, product design, and so on.

Current reports allow management at various levels to be aware of previous results as well as developments, and it can check individual work levels.

Reports and reporting methods provide managers with factual information to perform their duties. This is the basis for policy making by current leaders.