Management accounts are a set financial statements, typically prepared on a monthly or quarterly basis. They provide key financial and statistical information that allow you to make timely decisions within your business. Management accounts consist of a profit and loss report, balance sheet, cash flow statement a short overall report of the business. Also, they can be tailored to your business and broken down into sections that will compliment the way you work.
There is no legal requirement to produce management accounts and they do not have to be filed with HMRC. However, they will be able to give you a better insight into your business and put you in more control of your finances than ever before.
Why should you have them?
You need to be able to monitor the money going in and out of your business and measure the performance throughout the year to successfully grow your business. With that we mean, looking at your accounts on a regular basis, with the inclusion of the profit & loss report, balance sheet, cash flow statement.
Most businesses only take the occasional glimpse of their bank balance. This is without understanding the information that shows the performance of a business through the documents listed above. Others are led to believe that having a healthy bank balance also means having a healthy business. At times, this is not the case – your bank balance doesn’t take into consideration future outgoings, trading conditions or the state of your sales process. Management accounts enable you to identify month-to-month or quarter-to-quarter trends that you didn’t know existed, allowing more opportunities to arise within your business.
This ultimately means you can…
- Measure the performance of your business
- Make more informed decisions based on up-to-date information
- Gain full control over your cash-flow
- Plan your tax and dividend payments
- Identify fraud in your business
At Xebra, we not only provide you with the management accounts but support you in making key business decisions by offering you advice based on the evidence right in front of us. If you would like to find out more on how we can help your business, give us a call on 023 8000 1313, or send us an email at enquiries@xebraaccounting.co.uk.