Running a business can be a challenging task, especially if you don’t have all the information you need to hand. Management accounts can be a helpful tool, enabling you to properly understand how your business is performing and inform any decisions you need to make.
What are management accounts?
Management accounts are financial reports prepared for internal use. They can be extremely useful for business owners and managers and can help with decision-making.
What information is included in management accounts?
Management accounts typically include profit and loss statements, cash flow reports, balance sheets, and key performance indicators (KPIs). Unlike statutory accounts, which are required for tax and legal purposes, management accounts are not compulsory and can be customised to suit your business needs.
What could management accounts be used for?
While they’re not legally required, management accounts can be beneficial for your business, especially if you want to:
- Monitor performance – regular reports can help track profitability, sales and cash flow.
- Improve decision-making – up-to-date financial data can help when planning and making strategic decisions.
- Better manage cash flow – improving your ability to spot potential shortfalls and ensuring you have enough funds.
- Identify trends and issues – to help pinpoint opportunities or problems quickly, and before they impact too heavily on your operations.
- Secure funding – if you’re looking to secure finance, your bank and any investors may need detailed financial reports.
If your business is growing or you need to get a better handle on financial control, management accounts can provide valuable insights to support your success.
To discuss creating specific management information for your business please get in touch.