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[29.08.2017]

How Management Accounts will benefit your business

 

MTD office

 

Having good quality management accounts can be hugely beneficial to your business. They help you make the right decisions that make your company more efficient and potentially more profitable. In this blog we address a number of key questions concerning management accounts.

What are management accounts?

Management accounts are a set of summarised accounts data prepared for the company’s management. The goal of management accounts is to provide key financial information to management to allow them to make short term financial decisions, and plan for longer term decisions.

What is the main advantage of keeping management accounts?

Management accounts are about being in control of your business and looking to the future. If you want to make projections for cash flow, predict your working capital requirements or check whether you’re likely to exceed an overdraft limit, management accounts are an essential starting point. If you’re a small one-person operation, they may not be necessary. But as any business grows, they become essential. So invest the time now and put control and reporting systems in place in your business.

How frequently should they be produced?

We would always recommend quarterly reports at a minimum if you’re a trading business, but monthly management accounts are ideal.

How much time and effort is involved?

There are very few excuses these days for not having management accounts, because there is so much technology out there to help. With cloud software, it’s an easier process than it’s ever been. Working collaboratively with your accountant you can benefit from their support and advice on a real time basis. As well as accounting software (such as QuickBooks or Xero), Apps are available that can help in many areas. There are Apps which enable direct feed of banking information from your bank into your accounting system. There are also Apps that scan and process invoices and expense claims and others that generate detailed reports you can easily tailor to highlight your Key Performance Indicators (KPIs).

What will it cost?

There will be some set up costs, though you pay a small monthly cost for cloud based systems rather than a significant outlay for desktop software. You may be able to outsource more work to your accountant. And, of course, there may be significant gains in terms of visibility within your business. The benefits that having good management accounts can bring to your business will far outweigh any additional costs incurred.

 

Keep visiting our site as we will be publishing a series of blogs about the benefits of Cloud Accounting in the coming weeks.

For support and more information on how the outsourcing services we provide can help your business contact us here.

Andrew Clifford

 

 

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