Proper planning and control are two major benefits you will receive for having a good reporting system. If reporting is available to your management at the proper time, current activities can be properly monitored and controlled and necessary corrective actions may also be taken in time. Basic principles are followed to make a reporting system more effective. Such principles are outlined below.
- Information Flow: Information should flow freely from the proper place to the correct end user of the report. It should be presented in a timely format to assist planning and co-ordination. The flow of report should not be not be interrupted because the flow of information is constant. The flow of information may be in many directions within an organization as orders, instructions, plans, etc. move in this manner.
- Accurate Information: Reports should contain only accurate information. If bad data is included in the report, it may lead to making bad decisions. Only accurate information helps in clearly understanding the situation. At the same time, the presentation of accurate information in the report should not be a costly proposition and should never result in the delay in the presentation of report.
- Proper Timing: The reason a report exists is to control unfavourable activities. A report should be submitted at the required time at any cost. If this does not happen, there is no use in preparing the report. In addition, the time and efforts used for preparing the report are also a waste. The timing of routine reporting should be strictly adhered to. The absence of information at required time contributes to making wrong decisions.
- Relevant Information: Only relevant information should be included in the report. The inclusion of irrelevant information is both confusing and a waste not to mention the increase the time taken to prepare the report.
- Basis of Comparison: The information provided by reports will be helpful when it includes a provision to compare with past figures, standards, or objectives. The trend of a variation can only be found a comparison. The requirement of corrective action is highlighted through the review of comparative information.
- Reports should be Clear and Simple: The purpose of preparing a report is to help the management in planning, coordinating and controlling. The report should be presented in straightforward terms that can be clearly understood. The report should be presented in a manner that is it is easy for the readers to focus on unfavourable issues and arrive at a conclusion. The information in a report is should be brief, complete, clear, and simple.
- Cost: Management should expect to incur expenses with regard to the preparation of the report. Such expenses should be in proportion to the benefits derived from the report. Ideally, more benefits should be available than the expenses incurred.
- Visual Reporting: A good reporting system will have visual reporting. Research shows that visual reporting with the aid of graphs, charts, and diagrams in comparison to descriptive reporting attracts the eye more quickly and leaves a lasting impression on the mind of the users.
- Principle of Consistency: Consistency is adhered to in a good reporting system. Formats should not frequently be changed and any changes should be justified.
- Proper Scheduling : Scheduling should be established to minimize the burden placed on staff. Employees must be given sufficient time to do the work properly, but the lag time between the collection of data and the finished report should not be great.