Benefits of Management accounts

As your business starts to grow, it's a good idea to have a better insight into your business finances. We support many companies by preparing monthly management accounts.

There is an extra cost to taking this approach, and the business owner or management team need to set aside time to review the management accounts every month.

However, we have found that there are a lot of benefits that our clients gain in the long run.

What are management accounts?

All Limited businesses have to submit statutory accounts on an annual basis. Management accounts are usually prepared on a monthly or quarterly basis and are not compulsory. You can decide which finances to track based on your business needs. They are essentially a snapshot of the financial health of your business.

For example, you may want to review monthly your:

• Balance sheet
• Cashflow statement
• Profit and loss account

As your business grows, you may decide to start to monitor your capital expenditures. We would work with you to determine what to include in your monthly financial report that fits with your business strategy.

The benefits of management accounts

Here are five benefits of having regular management accounts prepared for your business, there are many more, but we wanted to highlight some key ones that apply to all companies.

1. By tracking your cash flow regularly, you can plan your expenditures more effectively. You also get a better understanding of when cash comes into the business and if any customers are not paying invoices on time
2. You can start to identify trends in sales; there may be seasonal changes or other factors affecting sales which you can be included in your forecasting for the year ahead.
3. Management accounts give you an accurate overview of how your business is doing. The information you have, the better informed your decision making.
4. Helps with identifying your tax liabilities; this puts you in a better position at year-end. The more you understand about this may in, the longer-term help you to reduce your tax bill.
5. At the end of the year, you will find that your accounting costs will be much lower. Any issues that arise during the year will be picked up and dealt with immediately, which reduces time later in the year.

We hope this article gives you a better understanding of the benefits of having regular management accounts prepared. If you would like any more information, please do contact us.

You can call 01623 490 120 or email This email address is being protected from spambots. You need JavaScript enabled to view it..