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[09.10.2018]

Outsourcing Series: Management Accounts

 

Welcome to the third blog in our outsourcing series. Outsourcing frees up time for you and your employees to grow your business, providing a real benefit. Last week we looked at outsourcing payroll and auto-enrolment services. This week we will look at management accounts; how they can aid your business generally and why outsourcing this process to your accountant makes good business sense.

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 the business owner manager to allow them to make short term financial decisions, and plan for the longer term.

Why do I need management accounts?

Management accounts are about being in control of your business and looking to the future. If you’re planning on expanding your business, making capital expenditure or cutting back on costs, management accounts become very important to give you insights for your decision-making.

Can’t I get this information from my annual accounts?

By the time you come to review annual accounts, you might find that costs have spiralled or that issues have arisen which it’s now too late to resolve. By producing regular timely management accounts, you can get a real-time snapshot of how your business is performing.

How often should they be produced?

Management accounts are usually prepared monthly or quarterly. These can really help with capital expenditure planning, profit extraction and taking advantage of capital allowances. If you require key information at other intervals your accountant will work with you to help you develop the reporting system you need.

How can it work in practice?

Imagine a fast-growing and dynamic business which is struggling to keep control of costs and profit margins. Current processes are inadequate for the expanding company and the amount of profit made on each contract is unclear. With the help of cloud accounting software such as Xero and QuickBooks, this business could identify cost-saving measures, including the renegotiation of hire contracts and insurance. They could also quickly spot non-profitable business, allowing them to pick and choose more lucrative contracts.

Outsourcing management accounts

Outsourcing your company’s management account to your accountant frees up valuable time you could spend on growing your business. We have a dedicated team who have the knowledge and expertise in producing management accounts tailored to you and your business’ needs.

To read earlier blogs in our outsourcing series click here. Check back on our website as we will be publishing further blogs in our outsourcing series. This includes topics such as VAT returns and the Virtual Financial Director. For enquiries regarding the above or to discuss how we can help you and your business to grow please contact us.

Andrew Clifford

 

 

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