Do I need management accounts?

In this time of business uncertainty, I often ask myself why business owners fail to see the benefit of having up to date financial information that will equip them to make sensible business decisions.

Standard old school accounting will generally see company owners review their financial statements 3-9 months after the year end.  Where this can be good from a comparative prospective and be rewarding to see when the company is bettering previous years, I firmly believe that by having management information throughout the year could have potentially made those results even stronger.

So often we hear “I thought we had done better”.  By having up to date financials, owners are then able to make the decisions necessary to meet targets set and hopefully return better results.  On the other hand, decisions can be made early to help reduce tax liabilities.  This is rarely possible after the financial year has passed.

In business cash is king.  Management accounts allow business owners to see more clearly where costs are un-necessary and catch before they escalate.  This overall should improve profitability.  Management information can help keep on top of debtors and this combined with cost control will improve a business’s cash flow.

Most businesses are now using accounting software that will allow the preparation of management accounts to happen a lot more efficiently and quickly after the period end.

If you think your company could benefit from having management accounts produced, at Johnston Smillie we have a dedicated team who can help with your bookkeeping and management accounts requirements.

Management Accounts Service

Photo by Helloquence on Unsplash