Management reporting
Practical steps, records and official guidance on management reporting.
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Questions
71. How much must I sell each month to break even?
Break-even sales cover fixed costs after variable costs. For one product, divide fixed costs by contribution per unit.
- Use the same period for fixed costs and the expected selling price and variable cost per unit.
- Round required units up and compare them with practical sales capacity.
The calculator assumes one product or a stable representative mix; it excludes tax and financing cash timing.
Choose a pricing strategy · Break-even calculator
Link to question 7172. What is the difference between gross margin and markup?
Gross margin divides gross profit by revenue. Markup divides gross profit by cost.
- Use sales and the directly related cost for the same goods or period.
- Compare both percentages with the calculator and keep GST treatment consistent.
A zero denominator has no meaningful percentage; the calculator leaves that percentage undefined.
Choose a pricing strategy · Margin and markup calculator
Link to question 7273. What hourly rate should I charge to cover costs and earn a target profit?
Divide annual costs plus target profit by realistic billable hours.
- Include the owner’s pay target in costs if it must be covered before the stated profit.
- Allow for leave, administration, marketing and unpaid time when estimating billable hours.
The calculated rate is a cost recovery target before GST; customers’ willingness to pay needs separate evidence.
Choose a pricing strategy · Hourly pricing calculator
Link to question 7374. Which customers, jobs or service lines are making money?
Build contribution by customer, job or service line from consistent revenue and direct cost assignments.
- Allocate labour using recorded hours and identify material costs, discounts, rework and write-offs.
- Keep shared overhead allocation visible and compare results before and after that allocation.
An allocation method can change apparent profitability without changing total business profit.
Choose a pricing strategy · Margin and markup calculator
Link to question 7475. Why are my actual results different from my budget?
Compare actual and budget figures for the same period and accounting basis, then explain the drivers.
- Calculate the amount and percentage difference for income or costs.
- Split the difference into price, volume, mix, timing, coding and one-off items, then quantify each supported explanation.
The variance calculator measures the difference; it cannot infer its cause from two numbers.
Set up a cash flow statement · Budget variance calculator
Link to question 7576. Which financial reports should a small business owner review each month?
Review profit, financial position and cash together, with the balances that explain them.
- Prepare the P&L against budget, balance sheet, cash forecast, aged debtors and creditors, and key obligation reconciliations.
- Record exceptions, decisions, owners and dates for the next review.
Choose detail that changes a decision; a larger dashboard does not necessarily improve the review.
Set up a cash flow statement · Monthly close review pack
Link to question 7677. How do my business expenses compare with ATO small business benchmarks?
Choose the ATO industry and turnover range that match your business and reporting period.
- Map ledger accounts to the benchmark definitions and retain the mapping.
- Compare ratios with the relevant dataset and investigate differences in business model, year or coding.
The linked benchmark tool uses specified historical datasets; a difference is not proof of an error or non-compliance.
ATO benchmark comparison method
Link to question 7778. How do I value and report work in progress and unbilled work?
Separate the accounting basis for recognising revenue from the amount billed.
- Reconcile contract value, costs incurred, estimates to complete, billings and unbilled amounts.
- For a suitable construction contract, use the WIP schedule and review estimate changes and profit fade.
The existing tool covers construction cost-to-cost schedules; it does not classify every service contract.
Record keeping for business · Construction WIP schedule
Link to question 7879. Why has my gross margin fallen even though sales have increased?
Higher sales can coincide with a lower margin when prices, product mix or costs change.
- Compare revenue and direct costs by job or product; check discounts, labour efficiency, rework and cut-off.
- Use the margin and variance calculators, and review cost-to-complete estimates for construction work.
A total sales comparison alone cannot identify which driver reduced margin.
Choose a pricing strategy · Margin and markup calculator
Link to question 7980. How do I turn Xero data into a useful Excel or Power BI management dashboard?
Start with reconciled exports and a small set of decisions the report needs to support.
- Define account mappings, periods and measures, then tie totals to Xero before adding charts.
- Use the existing trial balance export and close pack, and document refresh and review steps.
The export tool supplies data; this guide does not install a Power BI connector or grant Xero access.
Record keeping for business · Xero trial balance export
Link to question 80Reviewed 11 September 2026. Compare the same reporting period and basis; historical benchmarks retain their published years. Tax guidance must match your year and circumstances.
One of 10 topics in the 100 Australian accounting questions.