Well curated management accounts can be an invaluable tool for business-owners, managers and directors, both when it comes to benchmarking performance against competitors and when it comes to making decisions for the better of the business.
Unlike statutory accounts, management accounts are not a ‘legal’ requirement and can therefore be tailor-made to your own business needs and priorities. Consequently, they are a useful point of reference in addition to your annual accounts, giving you a better idea of your progress at various stages of your business’s lifecycle.
For businesses and, in particular, SMEs and those just starting out, bookkeeping can be a big administrative burden. As a result, in order to be able to spend the time that they want to on actually running their business, many opt to outsource their bookkeeping function to professionals.
Arguably, the development of cloud accounting has made ‘outsourcing’ even easier and, where the production of management reports are concerned, the provision of information from client to adviser and vice versa is extremely efficient.
Claire says: “Cloud accounting software means our clients can more easily provide us with the information we need to produce regular management reports and enables us to produce reports tailored to the needs and priorities of each business.
“Sage Business Cloud Accounting, for example, allows us to create detailed profit and loss reports and balance sheet reports – both great sources of data that can help businesses to understand more about their financial performance, transactions, assets and liabilities, amongst other things.
“To be able to make business decisions based on the very latest data, to be able to manage cashflow effectively, to be able to review performance and forecasts and to able to have worthwhile discussions with your adviser based on up-to-date figures is really imperative to running your business successfully.”
What should management accounts include?
When it comes to producing management accounts for you, we are led by what you tell us you want to better understand about your business, by what you tell us you want to achieve in the coming months and by what you tell us are your financial priorities.
Management accounts will typically always include the following:
- Profit and loss reports;
- balance sheets; and,
- actual vs. budgeted figures.
Often, they may also include:
- Cashflow information;
- details of other KPI’s, such as debtor days; and,
- other data specific to a businesses particular needs and/or circumstances.
Regardless of what your management accounts are made up of it’s worth bearing in mind that, to really utilise them to their full potential and to extract maximum benefit for your business, you need to understand and be able to interpret what it is that you’re looking at.
An advisory approach to the production of management accounts
When it comes to producing regular and timely management accounts for businesses, we don’t just leave you to interpret the results alone. We will ensure that as well as always having the latest accurate data to hand, you also have the means to interpret it.
Our advisory approach means we place great importance on taking the time to discuss the various reports with you, to make correct inferences and to help you to make educated decisions, to drive your business forward.
How can George Hay help?
For more information about our online accounting and bookkeeping services in Biggleswade, Huntingdon and Letchworth, please contact us.