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Management accounting and reporting has several uses, but one of the newer applications of management reports is in employee reviews. Here are some tips for making reporting a part of your employee reviews.
Why Use Management Reporting?
There are a few main benefits for using management reports in your employee reviews. First of all, it's a great way to collect tangible data on your employees' performance; it may be hard to track every single contribution over time, but you can get some sense of an employee's dedication to the job if you collect data such as number of hours worked, number of sick days taken, and billable hours for each employee. These are simply a good starting point for discussing other achievements and areas for improvement. And they give you something qualitative to point to if you need to bring up any concerns.
How to Start Management Accounting
Management accounting and reporting should be implemented carefully in order to be most effective. It's a good idea to sit down with your accountant to see not only what is desirable, but what is possible. For instance, deciding to track billable hours for each employee may require your accountant to redo the way your employees track their hours if you're not already capturing this data. Your accountant can give you an idea of how much work each change would take and what other parts of your accounting records it will affect.
Once you've decided on which statistics to track, you may want to set a consistent timeline for your management reporting. Whether you feel that daily, monthly, or weekly reporting would be most helpful, it's good to collect consistent data so that you can see how the numbers change over time.
Let Your Employees Know What to Expect
Management accounting and reports are supposed to make your review system less arbitrary, so it's a good idea to let your employees in on the new review process. Let your staff know what kinds of things you will be tracking in your management reports, and tell them what level of performance they will need to achieve in order to be seen as successful. If your employees know what is expected of them going into the review, and then you provide the numbers to show a tangible measure of their performance, it can set a really solid foundation for discussing improvements you would like to see.
For more information, talk with a management accounting service, such as offered by Dale K. Cline, CPA PLLC.Share
2 June 2016