Document changes with an exception report

What is an exception report?

An exception report is a document that is intended to highlight developments, events, and problems that lie outside of the ‘normal range’ of things. Exception reports are generated in a wide range of settings, like banking, inventory reconciliation, project management, payroll, risk management, employee performance, etc.

Exception reports may pinpoint things that shouldn’t be included in a particular process. These can then be removed to improve efficiency and reduce waste. They can be used to reconcile a business’s inventory and facilitate the adjustment of buying procedures. An exception report can analyze the processes involved in project management and suggest improvements.

Exception reports’ intention is to pinpoint any developments, occurrences, or factors that don’t fall within acceptable parameters. By identifying these in good time, early action can be taken to deal with them.

This will not only avoid potentially serious problems but will also increase business efficiency overall. In this article, we’ll discuss why exception reports are so valuable and provide some useful exception report examples.

Why are exception reports so important?

A business leader must see the ‘big-picture’ when running a business, department, or unit. This has to happen concurrently with all day-to-day, routine details that running any enterprise entails.

The strategic use of exception reports to highlight issues is an effective management tool to ensure managers “see the wood for the trees”. They can be adapted to virtually any situation and are customizable and versatile. This makes exception reports helpful in a wide variety of business enterprises and many different scenarios and circumstances.

Here are just a few reasons exception reports are important:

1. You can get valuable insights from frontline staff on SOPs
   Frontline employees are an invaluable source of information on strategic operating procedures. They generally have excellent insights into what works and doesn’t work, and management should tap into this knowledge. Through asking frontline employees to complete exception reports, SOPs can often be improved and streamlined. Employees will also feel more involved and motivated. Inefficient, outdated, and flawed SOPs can be eliminated.
2. They will help to develop a flexible work culture
   Employees become demotivated if they feel that their voices are never heard, their concerns are ignored by management, or that management is still sticking to rigid work expectations when a change in circumstances has made those expectations unrealistic and unattainable. Allowing employees to complete exception reports gives them a voice. They can, for instance, explain why delays happened or highlight bottlenecks that cause frustrations and inefficiency. Morale and efficiency will both be improved.
3. They can create a dialogue with employees to improve accountability across the board
   Managers and supervisors can initiate a valuable dialogue with employees through the introduction of exception reports. Exception reports will improve insight into just why things went wrong and the best solutions to prevent those recurring in the future. This is frequently a better long-term option than warnings and disciplinary action.
4. They can build up a database of past mistakes to develop effective preventive strategies
   Exception reports will offer documentation about past failures so that those issues can be avoided in the future. This makes it possible to address inefficiencies and maximize operational strategies.

What are the key features of an exception report?

Exception reports can act as an early warning system to alert management about potential problems that are developing. They are, therefore, a valuable management tool to avoid the disruption of work schedules and programs. They can prevent the breach of agreements between clients and providers with serious financial and legal implications. They are also instrumental in understanding why problems occur and how to avoid them in the future.

An effective and comprehensive exception report should do the following:

1. Present the timeline, objectives, and resources already invested.
2. Itemize and document ‘goofs’ – mistakes, oversights, failures, miscommunications, mishaps, etc.
3. List the relevant reasons and factors that led to delay, deviation, and/or disruption.
4. Analyze the impact of said problem, delay, deviation, and/or disruption.
5. List goals, aims, and accomplishments that have been achieved.
6. Show where performance metrics, procedures, and outcomes deviated from expectations.
7. Present evidence of what happened, i.e., written documentation, graphics, or photos of the problem.
8. List requests and suggestions/recommendations made to complete the project.
9. Flag outliers that need to be followed up and resolved.

Some exception report examples

Exception reports will obviously differ according to the industry, the department that generates it, the aim of the report, and the incident or event that gave rise to it.

Here are just a few exception report examples by industry:

1. Accounting
   • Revenue and expense exception report
2. Financial Management
   • Audit exception report example
   • Internal audit exception report
3. Computing
   • End-stage exception report/exception handling
   • Data rule exception report
   • Multi-project security exception report
4. Construction
   • Project manager’s exception report
5. Hospital Management
   • Hospital work schedule review and flowchart exception report
   • Quality improvement and quality assurance projects
6. Management
   • Revenue and expense exception report
   • Business plan exception report
   • Risk management exception report
7. Human Resources
   • Weekly payroll exception report example
   • Employee performance exception report

Examples of how exception reports can be used

Exception reports are used in many ways, but first and foremost their purpose is information. This can be about a process, an event that happened, a system or process that is not working efficiently, or a problem that cropped up.

Here are just a few uses of an exception report:

• It can list documents missing from a business or enterprise’s files or archives.
• It can itemize documents or forms that are outdated.
• In the banking industry, it can track commercial loans and itemize deposits, trusts, promissory notes, auto insurance, etc.
• It can reconcile business inventories.
• For the investigation and implementation of project management processes.
• For the adjustment of products and good purchases in the case of errors.

Improve the documentation process of the exception report

It is as important for companies to identify what is working well as it is essential to know early on what is not. Exception reports are the right choice for uncovering and eliminating inefficiencies to reach their maximum potential.

Exception reports no longer have to be used as paper documents. A digital application like Lumiform makes it easier for companies to highlight developments, events, and issues outside the “normal range” by using checklists to conduct regular audits. The required reports are then automatically generated by the tool. In addition to these time-saving features, Lumiform offers the following functions:

• Download a ready-to-use template for your digital exception report from Lumiform’s library.
• Convert your existing paper templates to our digital format or easily create a template from scratch using the flexible form builder.
• Take photos and annotate them to make your exception report more descriptive.
• Generate exception reports automatically after each review and route them through the app to key stakeholders to save time, energy, and resources.
• Store all exception reports securely in the cloud to ensure data is accessible only to authorized personnel and at all times.