What You Can Measure, You Can Manage for Lawyers and Business Owners
- Arnold Shields
- Jan 18, 2012
- 2 min read
Updated: Jun 10
One of the greatest challenges in advising small and medium business owners is encouraging them to step away from the tools and start working on their business. This is particularly difficult when the owner is an industry expert. Their biggest fear? That no one else can deliver their standard of quality—and customers will notice.
But long-term success doesn’t come from doing all the work yourself. It comes from managing processes, building systems, and empowering others to uphold your standards.
The Role of Management Reporting in Business Growth
As forensic accountants, we’re regularly called upon to evaluate profitability, cash flow, and business viability—often as part of a legal claim or valuation. A key indicator of business maturity is whether a management reporting system exists, and how well it’s used.
The lack of regular reporting is a red flag. It suggests reactive, rather than proactive, management. Conversely, strong reporting practices reflect a business culture geared toward growth, resilience, and strategic decision-making.
What Should Be in a Management Report?
At a minimum, reports should be prepared monthly or quarterly and include:
Profit & Loss Statement
Balance Sheet
Breakdowns by business unit, department, or location
Comparison to budget
Variance analysis with commentary
Relevant KPIs
Some valuable KPIs for service-based businesses include:
Number and source of new enquiries
Enquiry-to-sale conversion rate
Sales per customer (average value and frequency)
Customer concentration risk
Stock/WIP and debtor days
These indicators form the foundation of strategic conversations about performance, risks, and growth opportunities.
Why ‘Gut Feel’ Isn’t Enough
Many business owners rely on gut instinct when it comes to tracking performance. That might work for short-term decisions—but not for long-term growth or when facing litigation. Management by numbers doesn’t mean ignoring instinct; it means supporting instinct with data.
Hard numbers give business owners clarity and control. And for litigators, documented reports can make or break a claim for loss or business valuation.
Involving Your Senior Team
A management reporting system works best when senior staff contribute to the process and review the results. Transparency leads to buy-in. Buy-in leads to improvement. That’s how you build a business, not just a job.
Forensic Insight, Strategic Impact
As a forensic accountant, analysing a business with a strong management reporting system is a vastly more accurate and efficient process. As a business advisor, it’s a pleasure to work with clients who want to grow by design. not by accident.
Want Help Building a Reporting System?
If you're a business owner ready to take control of your performance—or a litigator needing insight into how reporting affects a claim. we're here to help.
📞 Call us on 02 9411 5422 to speak with an experienced forensic accountant and advisor.
Disclaimer:
The information provided in this article is general in nature and does not constitute personal financial, legal or tax advice. While every effort has been made to ensure the accuracy of this content at the time of publication, tax laws and regulations may change, and individual circumstances vary. Dolman Bateman accepts no responsibility or liability for any loss or damage incurred as a result of acting on or relying upon any of the information contained herein. You should seek professional advice tailored to your specific situation before making any financial or tax decision.
