Financial Management accounts

Management accounts are invaluable in helping you to make timely and meaningful management decisions about your business.

The obvious questions are:

·         Did your Business make profit last month?

·         If so which product generated the highest margin & can I improve on it?

·         Which product provided the least amount of profit & what should I do about it?

·         What was my wastage?

·         Did we cover our overhead costs?

We believe the owner manager should know the answer to these questions and can only be achieved through management account production.

Different businesses will have different management accounting needs, depending on the business areas that are important to them.

There is no legal requirement to prepare management accounts, but it is hard to run a business effectively without them. Most companies produce them regularly - e.g. monthly or quarterly.

Management accounts analyse recent historical performance and usually include forward-looking elements such as sales, Cashflow and profit forecasts. The analysis is usually performed against forecasts and budgets that have been produced at the start of the year.

The information in management accounts is usually broken down so that the performance of different elements of the business can be measured. For example if a business has more than one sales outlet, there might be a separate report for each. There may also be a report produced to show how well a particular product has done across different outlets.