Management Accounts
Management accounts are the most misunderstood of all accountancy services and can be a hugely useful tool.
As discussed in our accounts section, having annual accounts completed in a timely manner (as soon as possible after your year end, not at the last minute) can have a huge impact on your business’ performance. The limitation with relying solely on an annual accounting service however is that an issue that occurs in say the first three months of the year wouldn’t become apparent until the end of year accounts are produced. For example, if a business’ electricity costs increased in month two, but this wasn’t picked up on until after month twelve, there have been an additional ten months of over spend. If this business was producing regular management accounts (monthly or quarterly), the business could have picked up on the over spend straight away and switched supplier. This would result in a higher profit for the remaining ten months of the year.
Management accounts can also be used to monitor and manage receivables (customers who have yet to pay you) – this is something that can have a huge negative effect on business cashflow. Putting in place a system to manage your customers and their invoices is vital and needn’t be complex or time consuming. Many of our clients manage their customers’ accounts with software, which makes the whole process quick, reliable and effective – clients save time and money.
There is a wealth of benefits to be achieved through management accounting, no matter what the size of business. At Caroline Hinde Accountancy, we provide training for clients who want to complete their own record keeping and produce their own reports. We can also take it all away and do it for you, if you prefer! If you’d like to discuss what type of reporting would work for you and your business, get in touch to arrange a free consultation.
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