3 ways to improve the quality of management information

Management information is in need of an overhaul, according to a finance benchmark survey conducted by Deloitte. Just 40% of the 216 organisations polled considered the information provided by their finance function to be insightful.

The poll results suggest that smaller firms are deriving more benefit from this type of information. Forty-eight per cent of companies with revenues of less than £100m ($154 million) regard management information as insightful, compared with just 35% of those with higher revenue.

Three areas of focus

By improving the quality of management information, the finance team can support effective decision-making and help the business understand how much progress has been made towards growth targets. The survey report highlights three key areas finance leaders should focus on:

1. Improving data quality

The survey found data quality to be an area of concern in many companies. Currently, 66% of respondents do not conduct regular reviews of finance data to ensure accuracy, and 9% do little or no quality testing of data.

In this context, there are significant opportunities for the finance function to achieve greater data accuracy and reliability by improving and simplifying systems.

2. The right balance of KPIs

Ensuring a good balance of forward-looking indicators and lagging indicators can help provide a clearer picture of performance, according to the report.

Six in ten finance functions do not regularly review the alignment of their key performance indicators (KPIs) with strategic objectives, according to the survey. Only 20% of respondents felt that their management accounts included enough lead KPIs.

Larger companies typically measure 16 to 20 KPIs in their monthly management reporting, while those with revenues of less than £100m monitored between seven and nine indicators. Respondents felt that the optimum number would be 10 to 12.

Respondents also felt it would be beneficial if there were more non-financial KPIs in their accounts. Suggestions included future orders pipeline, employee retention rates, customer satisfaction, enquiry-to-sales conversion rates, and corporate responsibility initiatives. 

3. Investing in talent

Improved data review processes and a more targeted balance of KPIs can free up time for finance professionals to focus on analysis, and investing in the right talent is an important factor in improving the quality of management information. 

However, respondents noted that finding candidates with the appropriate skills and qualifications has proved challenging. The survey found that the most difficult roles to recruit for were in analytics, business intelligence, and financial planning and analysis. Technical accounting and statutory reporting came in second, followed by finance business partnering and commercial finance.

Insufficiently attractive remuneration packages and the location of the workplace were the other most commonly cited obstacles to recruitment. In this context, finance leaders must provide opportunities for staff to develop their analytical skills and commercial understanding.

“By addressing these priorities, finance leaders can ensure their functions are ready to deliver the data and insight businesses need to support growth,” Simon Kerton-Johnson, a Deloitte finance partner, said in a news release. “As the economic outlook gradually improves, the finance function can help business leaders understand where to focus investment, monitor the impact of new strategic initiatives, and track performance, progress, and profits.”

Samantha White ( is a CGMA Magazine senior editor.