Reports for action;

              Reports for Action
BY WILLIAM W. GERECKE Principal, San Francisco Office
Presented before the San Francisco Chapter of The California Society of Certified Public Accountants—December 1959
THE term Management Reports conjures up many types and styles of reports, from the conventional income statement to analyses of product cost. To each of you it probably suggests a specific presentation of information you have found to be valuable. How­ever,
management reports, by their title, should basically report on the performance of managers. This group of men in every business enterprise is responsible for making a profit. They have the respon­sibility
for making the decisions that direct the business, regardless of their titles, the size of the business, or the formality of the or­ganization.
They produce sales and they incur expenses, Although they work collectively, they act as individuals, and these actions should be measured.
Successful management has frequently been described as one that has made the right decisions 51 per cent of the time. Regardless of the validity of this statement, it is indicative of the difficulty of decision-making. It may also be indicative of the inability of man­agement
to localize the responsibility for action and to initiate steps to take advantage of the circumstances whether it be to increase sales activity or to eliminate the cause of unusual overtime. Decisions generally have their origins in historical facts or in plans for the future. Where they are applicable, accounting reports to manage­ment
should strive to satisfy either source by providing compre­hensive
knowledge of what has happened that can be applied to pre­dictions
of what will happen. This can frequently be accomplished by identifying the problem in terms of specific responsibilities for action, thus enabling management to concentrate on the decisions at hand.
The growth of business in both size and complexity has in­creased
the chief executive's need for a reporting system that recog­nizes
the accomplishments of each manager. He is at the point of
PURPOSE OF REPORTS
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