Developing financial and non-financial models to help plan and control your company's growth is essential to your success.Non-financial models focus on the process of
achieving the desired results and the interrelationships that are created between the key elements crucial to your success.
You must develop and monitor these key relationships and financial ratios to help you track
the condition of your company. The non-financial models capture important relationships within the business. Such models focus on the process of achieving the desired results. These models will help
you understand, measure and manage all the related activities.
You also need to be aware of your company's financial position. This can be accomplished by monitoring key financial ratios that help assess your
company's financial performance. Your company's financial performance can be judged in relation to its past performance, budgetary expectations and industry data. These ratios can help you determine your
company's current trend and decide what, if any, additional action is required.
Effective use of non-financial models and financial ratios requires timely, reliable and relevant information. The use of exception
reports can reduce the time spent on trivial variances and routine matters. This, in turn, will increase your focus and effectiveness.
Information Properties
- Relevance
- Quantifiability
- Accuracy
- Conciseness
- Scope
- Source
- Presentation
- Timeliness
Information Needs Analysis
- Identify the key responsibilities and decisions of the user
- Determine suitable performance measures
- Walk through the decision process
- at each step, identify the specific information needed and the decision model to be used
- Conclude analysis by determining any additional information required
Classification of Reports
- Conciseness - detailed / summary / exception
- Occurrence - scheduled / demand
- Purpose - operational / planning / control
Design Features of Effective Reports
- Relevance: tied to the decision process of the user
- Conciseness: omit all unnecessary and irrelevant details
- Adequate Discrimination: allow meaningful analysis and comparison
- Appropriate Scope: related to the responsibilities of the user
- Understandability: clear and readily understandable format
- Timeliness: issued in a timely manner
- Reliability: high standard of accuracy
- Consistency with Other Reports: information consistent with information presented in all of the other related reports
