Glossary
Management control
The business function that monitors and analyzes financial data to support the entrepreneur's decisions. It's not accounting — it's the intelligent reading of numbers.
What is management control
Management control is the activity of monitoring, analyzing, and interpreting a company's economic and financial data to support operational and strategic decisions. It's not accounting (which records facts) and it's not tax compliance (which handles obligations). It's the intelligent reading of numbers to understand where the business is heading and where to intervene.
What it includes
A management control system, even a minimal one, includes:
- Budget — planning future income and expenses
- Periodic reporting — comparing budget vs. actual results, with variance analysis
- KPIs — the key indicators that measure business health
- Margin analysis — profitability by product, client, or job
- Cash flow — liquidity forecasting
How it differs from what the accountant does
The accountant and the controller are complementary roles. The accountant works on the past (financial statements, tax returns). Management control works on the present and future: how the business is doing now, where it's heading, and what can be done to improve.
Do SMEs need it too?
Yes. Not in the complex form used by large corporations, but in principle: checking a few key numbers regularly, understanding the real costs of products, and making decisions based on data rather than gut feeling.
Learn more: Accountant vs. controller | 5 numbers to check every week