What do you mean?

So, you’ve heard ‘Management Accounts’ thrown around at networking events, at a recent seminar, and your bank manager is always asking for them. But you still can’t work out what the fuss is about, and still don’t have a clue as to what you need to do.

Maybe you’ve got to where you have on gut feel, and despite knowing that this is no longer the best approach for an established business, you don’t know how to go about getting the information that you need.

Don’t panic!

When we say ‘Management Accounts’ we’re quite simply talking about accurate and timely financial information that you can use to make business decisions. Management Accounts can be as little as a brief summary of the monthly/quarterly income and expenses – giving a profit and loss amount, the company balance sheet at a snap shot, a list of the customers who owe you money and suppliers you owe money to. Or they could even stretch to departmental reporting on profitability and commentary on the numbers. They’ll help you highlight what has gone well and what hasn’t, and whether you’re on track to meet the targets that you’ve set yourself.

How are they prepared?

Management Accounts are the next level of financial information that you need to look at after making sure that all of your day to day bookkeeping is being dealt with, and will be prepared from your accounting software. We’ll talk more about software requirements at the end of this post.

90% of the foundations of accurate management accounts should be done by a good bookkeeper (but often it’s the final 10% that can make a huge difference to the accuracy of the figures). Dealing with sales invoices, recording purchase payments and processing your wages are all routine day to day tasks.

If you’re struggling to find the right person to help you with this, why not give our sister company A4G Bookkeeping LLP a call? 

I have my management accounts, now what?

You’ll need to spend a couple of hours working through them. Decent computerised accounts packages will produce a report that compares the current month to the same period of the previous month. This report will help you to identify trends, monitor budgets and keep track of any changes. You’ll also find this report useful for uncovering any problem areas, and over time this will become an invaluable part of your management. You’ll find that dealing with a small issue more swiftly will prevent bigger problems occurring later, making the business more successful.

Have you ever wondered if the new product you developed is making money yet? Are you concerned that your stationary costs have rocketed but you can’t be sure? A regular review of your management accounts will help you to answer these questions and you’ll be equipped with the information you need to make the right decision for your business.

Okay, I’m convinced, what can you do to help?

We can complete your management accounts on a monthly or quarterly basis – we do this using the information provided to us by your bookkeeper, or we can start from scratch and provide assistance with the bookkeeping to get you to the point at which this is possible. Management accounts will only be as accurate as the data entered into them, so it’s important that your bookkeeping is being completed to a good standard.

We’re a firm of chartered Accountants, so financial jargon comes naturally to us – but we pride ourselves on being advisers that speak your language and will always explain the management accounts to you clearly, providing invaluable feedback and commentary on the numbers.

We’ll also help you to pick the right software package, help you with the instalment and setup and provide any necessary training. If you’re already set up with an established software package, we’ll review this to ensure that it’s still right for you, and help you through the transition if there is better software to suit your needs.

Give us a call on 01474 853856 to chat about how our management accounts service can help you.

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