Introduction
We have to be careful in this section; we have strong opinions on this matter. We have seen too many hit-and-miss accounting reports to managers – difficult to decipher and not very useful or relevant to the manager’s decision-making needs and control functions. Part of the problem lies with the managers themselves. As a business manager, have you told your accounting staff what you need to know, when you need it, and how to present it in the most efficient manner?
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Probably not. When you stepped into your position you probably didn’t hesitate to rearrange your office and maybe even insisted on hiring your own support staff. Yet you most likely lay down like a lapdog regarding your accounting reports.
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Easily digestible manner
Maybe you’ve assumed that the reports have to be done a certain way and that arguing for change is no use. Way and that arguing for change is no use. On the other hand, accountants bear a good share of the blame for the poor reports. Accountants should proactively study the manager’s decision-making responsibilities and provide the information that is most useful, presented in the most easily digestible manner.
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Conclusion
In designing the chart of accounts, the accountant should also keep in mind the type of information needed for management reports. To exercise control, managers need much more detail than what’s reported on tax returns and external financial statements. And, as Chapter 9 explains, expenses should be regrouped into different categories for management decision-making analysis. A good chart of accounts looks to both the external and the internal (management) needs for information.
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