Importance of Business Reports in Business Success
Business reports provide precious insights into the functioning of every organization. You can recognize operations that are performing well. You can ascertain processes that are not functioning up to the mark and require close monitoring for achieving improvement. Business reports play a vital role in the success of a company. Does your company have a good business reporting culture? How can you achieve good business reporting with ERP? These are some of the topics we will cover in this article.
What is a Business Report?
Business Dictionary defines “Report” as follows: A document containing information organized in a narrative, graphic, or tabular form, prepared on ad hoc, periodic, recurring, regular, or as required basis. Reports may refer to specific periods, events, occurrences, or subjects, and maybe communicated or presented in oral or written form.
Thus, it evident, that Business reports should be designed in an easy to understand format, generated frequently and regularly. Business reports should be circulated and made available to the important people in the company to make timely & informed decisions.
What are the Objectives of Business Reports?
Business reports are prepared with some of the following objectives in mind:
- Fact Representation: To get a real & accurate overview of organization performance.
- Performance Evaluation: To evaluate the performance of various functions, departments, units of the company, and compare performance with the defined KPIs.
- Problem Identification: To spot problem areas, wastages, blockages, and find out the reasons for the same.
- Proper Management Control: To identify whether planned & scheduled activities are taking place properly or not.
- Decision Making: To arrive at a conclusion based on hard fact and numbers about changes required to improve efficiency and productivity
Business reports provide significant insights, highlight small problems before they become big, provide possible solutions to potential problems. Thus, Business reports are a significant mechanism to ensure that companies stay on course to achieve their business objectives and succeed.
What is the importance of Business reports?
Business reports provide transparency and accurate visibility into the company’s spending, profits, and growth. This data is vital for designing business plans, allocating budgets & resources for important areas.
Business Reports & Business Data collected over a while, provide insights into the trends in your business. This becomes strategically important for making future forecasts, planning activities for the subsequent periods. Moreover, you can also compare your company’s performance with the industry standards to identify areas of improvement.
Senior Management can effectively imbibe a culture of making informed decisions by insisting on the generation of business reports and using the insights derived from business reports to make informed decisions. Senior Management can also use these reports to roll out changes and monitor the progress with follow up reports.
How ERP can build a data-driven culture with Business Reports & Analysis?
An ERP software gathers, organizes & provides a real-time view of data from all processes, departments & units of an organization. This lays the foundation for accurate business reporting. ERP can provide reports based on different Job Functions & Job Roles. You can generate reports based on various categories such as Costing, Performance, Statutory Reports. You can view reports consolidated at the Head Office Level or even drill down to the transaction level.
Now let us see what different kinds of data you can gather, which important aspects you can monitor and which reports you can generate with the help of ERP software.
1. Procurement or Purchasing Reports
Procurement is the strategy for purchasing raw materials, consumables, capital items, and so on. Procurement consists of almost 60% costs of the manufacturing company. Hence it is important to keep a close eye on this function and monitor costs. With ERP you can generate the following reports for Efficient Procurement.
- Purchase Order Cycle Time
- Average Cost of Processing a Purchase Order
- Purchase orders processed electronically
- Supplier Rating Report
- Cost Reduction achieved during Procurement
- Procurement ROI Report
2. Inventory Reports
Inventory is extremely important to ensure materials are available at the right time to the right production process. With the help of ERP, you can generate some of the following reports to stay on top of inventory management.
- Average Inventory Report
- Ageing Analysis Report
- ABC Analysis Report
- XYZ Analysis Report
- Inventory Turnover Report
- Inventory Valuation Report
3. Sales Reports
The sales process involves lead generation, follow-up, and sales closure. A company’s success largely depends on the sales function. With ERP you can generate the following reports to get an accurate view of the sales process.
- No. of. Leads target vs. Actual Leads Report
- Activity per sales representative Report
- Qualified Lead to Win Conversion Report
- Average Sales cycle Report
- Monthly Sales Revenue Report
- Product Performance Report
4. Quality Reports
Customers constantly expect high-quality products & services. Hence you must monitor Quality Reports such as:
Percentage Defect Report
Failed Audits Report
5. Customer Reports
Customer satisfaction is the single most influential factor for any business to flourish. Companies must, therefore, gather reports on the timely product deliveries and gather customer complaints & feedback for continuous product improvement.
- On-Time Delivery Report
- Customer Returns Report
- Customer Complaints & Feedback Report
- Root Cause Analysis & Area of Improvement based on Customer Review
6. Financial Performance Report
Every company must effectively manage its cash flow. ERP provides excellent reports to identify how well your company is performing in terms of generating revenues and controlling expenses. You can generate reports such as:
- Cash Flow Report
- Fund Flow Report
- Profit & Loss Account Statement
- Balance Sheet
- Payables & Receivables Reports
7. Plant & Machinery Reports
ERP software gathers all important information related to the functioning of the Plant & machinery in the organization. With the help of ERP, you can generate some of the following reports to ensure optimum utilization.
- Capacity Utilization Report
- Overall Equipment Efficiency
- Machine Downtime
8. People Performance Reports
It is said, “People Build Businesses”. How well are your people performing? How can you improve their efficiency? All this is important for every company to succeed. Some Employee Reports that companies must monitor are:
- Revenue per Employee
- Employee Training Hours
- Employee Turnover Ratio
9. Expenses/Costing Analysis Reports
ERP provides real-time, in-depth reports for various costs incurred by the company. You can analyze the pattern of expenses and review whether they are in line with the estimates or need a course correction. With ERP you can generate reports such as:
- Cost of Production
- Cost of Overheads
- Departmental Expenses
- Cost of Materials
- Work in Progress (WIP)
Business reports pinpoint areas to channelize your efforts in the right direction to achieve the business objectives. Make it an inherent activity of your organization to generate reports regularly and leverage the business insights for improving your business performance and achieving success.