As a small business owner, you may have come across the concept of an MIS report. Referring to key business reports that help you analyse your business function, MIS reports are an essential concept to understand. That's why we have compiled this short guide on what an MIS report is, how it works, what its components are, the different types of MIS reports, and why they are essential.
What is MIS reporting?
MIS Report stands for Management Information System and is an umbrella term to describe a set of reports that give a view of the day-to-day activities of a business which allows your business's functions to be analysed. They are required by the management of a company to assess its performance and optimize decision-making. Business operations can entail hundreds of e.g., transactions per day and those will be documented. So, an example of an MIS report is a sales summary report. Crucial business dealings are recorded in those reports which is why small business owners must understand these management control reports.
MIS reports are typically prepared for the management of a business based on (automatically-)collected data on the company. MIS Reports consider different data from various sources - both digital and human. They consist of several different reports, covering various departments of a business and provide a useful tool for evaluating a company's performance and making well-informed decisions. They can help you identify problems, pressure points, bottlenecks, and opportunities within your company. MIS reports are likely to change from business to business depending on what needs to be viewed and why.
How does MIS reporting work?
Of course, the exact process of MIS reporting depends on the company in question. Some businesses might, for instance, take trending data, automated digital data, or data supplied by staff members. Some MIS reports are prepared periodically (e.g., monthly or quarterly). These reports are prepared by different departments in a company and presented to the company’s management team.
When properly formatted, they can tell you how profitable a product or business area is, if you are considering expansion, how your business operations are doing, or highlight any problem areas or parts of the business that need resource attention.
Automation in MIS reporting
Some companies are using automatic management information systems (MIS) - in this case, raw data is of the essence. The database will likely be connected to all the core parts of a business's operations to pull data. The system then manipulates the data to create specific reports where required. This requires a system of complete, error-free, timely, reliable, and relevant data.
The results of these reports can be highly informative. For example, if you analyse the variance between your business's estimated target compared with the achieved results demonstrated in your MIS report, your business may be able to identify and adopt new practices that would result in higher performance.
What are the components of a MIS report?
MIS Reports will vary between different organizations and be dependent on their end need - but most MIS reports will be made up of:Â
- Data: This can be sourced digitally, or collected automatically or manually
- People: Those feeding into the end report and those reading and utilizing the results
- Business Procedures: System of recording, storing, and analyzing the data in question
- Hardware: The physical elements of your business whether that’s the office photocopier or a set of servers
- Cash flow forecasting and reporting software: Programs that can be used to analyze and present data (alternatively, you can use e.g., Microsoft Excel)
What are the different types of MIS reports?
There are several different types of MIS reports. Which ones apply to you depends on several factors.
- Summary MIS report: Summary reports aggregate all information and data to showcase a clear holistic picture of your business's finances.
- Trend MIS report: Trend reports are used to compare your business's past performance with the present. This can help you understand how well your business, or parts of it, are performing.
- Sales MIS report: Sales reports typically include an overview/ visual of products sold during a specific period (e.g., month or quarter). This helps you understand the sales variance in your company (i.e. the difference between budgeted and actual sales) as well as other factors, such as the geographical distribution of products sold.
- Profit MIS report: Profit reports showcase the difference between actual and estimated profit generated by your company. This could also look at factors that led to profit or less in a specific period.
- Inventory MIS report: Inventory reports help you understand and manage the products in your business's inventory. This should include the number of items in stock, best-selling products, top-selling categories of products, etc. This can help inform business decisions considerably.
- Cashflow MIS report: Cash flow reports identify and show the exact amount of cash inflow and cash outflow in your company. The report will typically include cash flows from your company’s operations (the core business), and any investments and financing, such as external investors. This provides you with an insightful overview of the financial state of your company.
- Accounting MIS report: Accounting reports refers to several different financial documents. This describes all reports concerned with a company's financial position, operational performance, and economic activities of the business.
- Exception MIS report: Exception reports present all "exceptions", i.e. any abnormal or unusual circumstances within your business. This can help you identify problems and potential issues in your business early to react in time.
How to create an MIS report
Creating an MIS report involves a structured process to ensure accuracy, clarity, and relevance. Below are the essential steps to follow:
Step 1: Define objectives
Before compiling an MIS report, clearly define what you want to achieve. Determine the key metrics, financial data, or operational insights that need to be included. Setting clear objectives helps ensure the report is focused and provides actionable insights.
Step 2: Collect data
Gather relevant data from various sources, such as accounting software, CRM systems, or internal databases. Ensure that the data is accurate, up to date, and aligned with the report’s objectives.
Step 3: Organise and analyse
Once the data is collected, organise it into a structured format. Use spreadsheets, dashboards, or reporting tools to categorise the information. Then, analyse the data to identify trends, patterns, anomalies, and insights that will support business decision-making.
Step 4: Create the report
Compile the analysed data into a well-structured document or presentation. Include charts, graphs, and tables to visualise key findings. Ensure that the report is clear, concise, and easy to interpret.
Step 5: Review and present
Before sharing the MIS report, review it for accuracy and completeness. Ensure that the insights align with the initial objectives. Finally, present the report to relevant stakeholders, such as management, investors, or department heads, using a format that facilitates discussion and decision-making.
Why are MIS reports important?
MIS reports play a crucial role in helping businesses track performance, identify challenges, and make informed decisions. Below are some key benefits of using MIS reports:
Decision-making
MIS reports provide valuable insights that support strategic decision-making. By analysing key metrics, businesses can allocate resources more effectively and identify opportunities for growth.
Problem identification
These reports highlight problem areas within a company, allowing management to address inefficiencies and resolve issues before they escalate.
Business growth
For companies looking to expand or attract investors, MIS reports offer critical data that answers key questions about financial health, market positioning, and operational performance.
Internal and external communication
MIS reports enhance transparency by providing employees with a clear overview of business performance. They also facilitate better communication with investors and stakeholders by offering a well-structured financial summary.
Improved performance
Regular reporting allows businesses to track productivity and financial health, ensuring that goals and targets are being met efficiently.
Operational efficiency
By analysing operational data, businesses can streamline processes, optimise workflows, and improve overall efficiency.
Better planning
With accurate data from MIS reports, businesses can create more effective long-term plans, set realistic goals, and mitigate potential risks.
MIS report FAQs
- Who uses MIS Reports?
MIS reports are typically used by the management of a business to understand how the company is performing and inform decision-making.
- How do I make an MIS Report in Excel?
You can make an MIS report in Excel by using functions such as formulas, pivot tables, graphs, and charts. There are several free guides and tutorials available online.