The year end accounts are used to review how your business has done in that period and to present to your bank manager if needed. To improve the business you need to look at the past results for areas that need attention, this is where management accounts and cash flows are useful.
Management accounts are aimed at helping you to plan your business and make decisions about key areas such as sales, costs, margins and stock levels. Management accounting can help you run your business more effectively and provide a clear plan of direction.
Management accounts are invaluable in helping you to make timely and meaningful management decisions about your business.
Different businesses will have different management accounting needs, depending on the business areas that are important to them. These can include:
* The sales process - including pricing, distribution and debtors
* The purchasing process - including stock records and creditors
* A fixed asset register.
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, quarterly or bi-annually.
From management accounts can be produced cash flows and profit forecasts. The management accounts can be compared to historical performance and variances can be produced and analysed.
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 outlet. There may also be a report produced to show how well a particular product has done across different outlets.
Call us now on 01245 326280 to discuss what you need.