Management Accounts

What are Management Accounts?

Management Accounts is the name given to the prompt production of similar information to that which is included in the annual statutory accounts. They include the key numbers from the business that can be used to monitor its performance.

Key figures include the following:

  • Gross Margin
  • Costs
  • Profit
  • Debtors
  • Creditors
  • Progress against predetermined budgets

Usually produced monthly or quarterly, and very quickly after the period end, the information contained within them is highly relevant and enables you to regain control of the business if necessary, giving you the flexibility to react to changing conditions.

Why would Management Accounts be helpful?

They can provide real value to any business owner, but particularly one looking for growth, and are especially powerful for decision making:

  • Can you afford to offer an enhanced salary package to retain or recruit a key member of staff?
  • How much can you afford to spend on marketing to entice that ideal customer to come on board?
  • If you were to receive the response you’d like to a marketing campaign, could you finance the growth that may come with it?

Management Accounts can also help you sleep well at night, knowing that you’ll have funds to pay salaries, the tax man and other commitments.

Without accurate management information, most business owners would effectively be guessing at the results. Knowing where you stand within the business empowers the decision makers and inspires confidence.

How can we help?

An initial meeting identifies the key areas of focus within the business, and the required frequency for your management accounts. We’ll also discuss how the business books are kept at the moment, identifying any areas that could be streamlined or improved to make the process of producing the management accounts easier. We’ll work closely with your bookkeeper to set up the process internally, or, if preferred, can produce the accounts on your behalf.

Once prepared, it’s essential that you can interpret the information the management accounts contain and from there use the knowledge to move the business forwards. If the knowledge to understand the detail is already within the business, delivery may be as simple as sending the Management Accounts to the business owner, or it could include their presentation, explanation and discussion at a regular management meeting. The most common choice is usually somewhere in between!

More information can be included around predetermined Key Performance Indicators (KPIs) relevant to the particular needs of the business, or that can be used as part of our Outsourced FD Service. In this case, the Management Accounts and KPIs become the basis of our ongoing discussions.

If it’s easier for you, we can manage the whole process of producing your Management Accounts, from core bookkeeping, to presenting the end result in a way you’ll easily understand, allowing you to concentrate on running the business from an informed position. Contact us now to talk through the process.

Many of the areas that form part of a set of Management Accounts can be presented graphically which makes life much easier if you are one of many business owners who struggle to ‘see’ their numbers. Find out more here.

 

Read our related Blog Posts:

How do you know how much to save for tax? – At a meeting with a relatively new client recently, we were asked how he knew how much to save for his Corporation Tax as each month went by. This is a really smart question, as saving for your Corporation Tax as you get payments in from your customers is the easiest way to avoid a panic when the due date arrives.

Your business numbers can kill your business – We talk about the importance of knowing your business numbers a lot, as you’ll be aware if you’ve been around us for any length of time. There are lots of reasons why getting a good understanding of them is a really smart thing to do if you want to be successful, but it can be hard to apply those reasons to your own ‘day to day’.

Would your Management Accounts pass? – You may think that Management Accounts are pretty standard, and they should be, but a recent event proved that isn’t actually the case!

Why Management Accounts are relevant to every business – Many business owners think that Management Accounts are for big businesses, but that’s not the case! They are actually relevant for even the smallest business…

Understanding your Profit & Loss – Part 1 – A Profit & Loss Account is a summary of the revenue and costs within a business in a period. It could be over a month, or a quarter, but for many businesses is most often seen over a year as part of the end of year accounts.

Understanding your Profit & Loss – Part 2 – Following on from our earlier Blog, Understanding your Profit & Loss Account Part 1, there are some key numbers that are contained in your Profit & Loss Account. These can give you a really good insight into how your business is performing, and enable you to identify trends as they emerge.

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Related services

Management Information

One of the most important aspects of running any business is to know the numbers that reflect its performance, which comes from figures such as cash flow, creditors, debtors, profit, and progress against budgets.

Outsourced FD

As a business travels through its lifecycle, from start-up to being established and thriving, its needs also develop.

Year End Accounts

It may be a radical thought, but accounts produced for statutory purposes can also be put to good use within the business!

Business Plans & Cashflow Forecasts

Running a business can be exciting, but can be scary too! Monthly income can be uncertain and unpredictable, while the peace of mind that you can meet all of your commitments can be elusive, and keep you awake at night.

Download our FREE 'Guide to Knowing your Business Numbers'