Guide
MIS commentary and variance analysis that gets read
The tables in a monthly report say what happened. The commentary is the only part that says why — and it is the part most often skipped, written last, or reduced to reading the table aloud. Here is how to write it well.
Free to create. No subscription, and credits never expire.
Commentary answers one question: is there anything to act on?
A reader of a management report has a few minutes and one question: is anything here I need to act on? Commentary answers that by picking out the movements that matter, explaining each, and saying what happens next. If a sentence could be deleted without the reader losing anything, it was a caption.
A method that works
- Set a threshold. Agree which movements need a sentence — a percentage and an amount — so the commentary is consistent and nobody has to decide each month.
- List the variances. Every line over the threshold, against the right comparative: the same month last year for profit and loss, the previous month end for the balance sheet.
- Find the cause. Price, volume, mix, timing, a one-off, or a classification change. Timing and reclassification are worth ruling out first; they explain a surprising share of large movements.
- Write one sentence each. The movement, the figure, the cause. Add what is being done only when something is.
- Lead with what matters most. Order by impact, not by the order of lines in the table.
Weak and strong, side by side
Revenue for the month was $1.42m.
Revenue rose 11% on the same month last year to $1.42m, almost all from the two new distributor accounts opened in the quarter.
The table already says $1.42m. The sentence earns its place by saying compared with what, and why.
Gross margin decreased due to various factors.
Gross margin fell 2.1 points to 31.4% as freight costs rose; prices were not changed.
“Various factors” is an admission that nobody looked. Name the cause, or say it is not yet known.
Debtors increased significantly, which is concerning.
Debtor days rose from 48 to 57. Two customers account for most of the rise; both have agreed payment dates this month.
Adjectives are opinions. The figure, the cause and what is being done about it are information.
The companies and figures in these sentences are invented for illustration.
'Significantly' without a figure says nothing
“Significantly”, “substantially” and “concerning” without a figure. “Due to various factors”. “In line with expectations” when no expectation was written down. And any figure in the commentary that does not appear in, or follow directly from, the tables — a number the reader cannot trace is a number they cannot trust.
What people ask about writing MIS commentary
Which variances should the commentary explain?
Those above a threshold agreed with the reader — for example, any line that moved by more than 10% and more than a fixed amount against the comparative. Both conditions matter: a percentage alone flags tiny lines, an amount alone ignores large swings in small ones.
Should commentary compare with last month or last year?
Profit and loss lines are best compared with the same month last year, because seasonality makes month-on-month movements noisy. Balance sheet and working-capital measures are best compared with the previous month end, because that is what the business can act on now.
How long should MIS commentary be?
Short enough to be read before the meeting. A few sentences per section, each explaining a material movement, is usually right. If a movement needs a page, it deserves its own note.
Does Magic MIS use AI to write the commentary?
AI drafts the sentences, but it never writes a number. Every figure in the commentary is computed by the engine and inserted into the sentence afterwards, and a check rejects any draft that contains a figure of its own. Where the data does not support a conclusion, the commentary says so rather than guessing.
Read next
- KPIs and ratios for a monthly MIS: formulas and what they tell youThe ratios a monthly MIS or management accounts pack should carry — margins, debtor, creditor and inventory days, cash conversion cycle, current and quick ratio — with formulas.
- MIS with AI: an AI tool for MIS reports that never writes the numbersMIS with AI, done safely: AI recognises your raw data, maps ledgers and drafts commentary, while every figure comes from a deterministic engine and traces back to a ledger.
- Management accounts commentary examples: weak and strong, line by lineEight weak lines of management accounts commentary rewritten to name the cause, the six causes behind most variances, and a whole month's commentary put together.
Commentary where every figure is computed
Magic MIS drafts commentary on the movements in your month, with every number inserted by the engine from the report itself — never written by AI.
Prepaid credits, no subscription. Credits never expire.