What are they?
Management accounts show how your business is performing month by month. Unlike annual accounts, which have to comply with company law which makes them hard to understand, management accounts are prepared for you and can be tailored to your precise requirements, even including charts and graphs if this is your preference.
Why do I need them?
Relying on annual financial accounts to run your business is like driving whilst looking in the rear-view mirror - dangerous. A year's a long time in business, but the information in those annual accounts may be almost two years old by the time you review it. It's simply essential to monitor your finances much more regularly if you're to have any control over your business.
As the name suggests, management accounts are prepared to help you. They're not for the tax man or the bank. If your business is doing well, management accounts allow you to plan ahead and put tax-saving strategies into place before the end of your year. This saves you money.
And if your business is not doing quite so well, management accounts give you essential and timely feedback, enabling you to make changes and monitor the result. This could save your business.
Who are they for?
Just about any business should have management accounts. If you fit into any of the following categories, we'd suggest you could benefit hugely -
- Any business needing to keep control of margins, cash-flow and costs;
- Turnover in excess of £100,000;
- Bank or other borrowings;
- Limited companies withdrawing funds via dividends;
- High tax burden and looking for tax-saving opportunities;
- Considering expansion, acquisition or sale.
We can install software and train your team so that they can produce effective management accounts themselves. Or we can come in and prepare them for you from scratch.