Management accounts are not a legal requirement but are vital for a company's management to track performance, and may indeed be required by banks and investors.
The importance of evaluating the performance of any business before the year-end can be crucial. Clients are encouraged to monitor their performance and I help them by preparing monthly or quarterly management accounts, which they find invaluable. For any small business wishing to succeed, monitoring costs, revenues and cash flow in the early years is vital
We tailor management accounts to your requirements in terms of wording, layout, charts and key metrics tracked. Our objective is that our clients understand and use the accounts to improve their profitability and the value of their business.
How does your business organisation measure up?
Management often considers the following key areas, but traditional accounting systems may not be set up for, or indeed not capable of providing the reporting requirements necessary to monitor performance in:
Product profitability - Can immediate and accurate assessment be reported to show products that provide truly profitable business? Equally importantly, is the same information at hand for unprofitable lines?
Profits - Is it clear when and why profits have increased or deteriorated?
Cashflow - Can this be predicted over the next few months with any degree of certainty?
Overheads - Are they under control? Is it known which activities generate unnecessary costs?
Performance - Are key performance indicators and measures in place?
Future direction - Is the organisation’s strategy supported by a business plan?
Customers - Is reporting in place to assess which customers are truly profitable?
Balance Sheet - Is regular attention paid to the balance sheet, where all activities within the business operation are valued eventually?
If the answer to any of these questions is no, then the services of a chartered accountant specialising in management accounts may well aid management in monitoring business performance in the short, medium and long terms.
Oxford Accountant for Management Accounts