Management Accounts are regularly prepared financial reports and analysis intended for internal management and external stakeholders and any funders you may have such as banks or other lenders. They need to contain key financial information about a business to show how it is performing. Whilst they are not mandatory they are essential if you want to run a business in a professional way, using Management Accounts will allow  better-informed decision-making and closer monitoring of progress towards any goals and targets you may have.

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What should any Management Accounts include?

For many businesses, Management Accounts will include the same things. However, depending on the size and complexity of your company, they can be customised to include the detailed information that you may need.

In general, Management Accounts should include:

• A Profit and loss report detailing your company’s revenue, costs, and profits
• Current Balance sheet showing your company’s assets, liabilities, and equity
• Cashflow statement and forecast showing your company’s cashflow throughout the accounting period
• Key performance indicators (KPIs) measuring your company’s performance, including sales growth, profitability and costs
• Budget comparison that highlights your company’s performance against its budget
• Analysis and commentary that sums up the information above and highlights any trends and issues that need addressing.

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Who are Management Accounts for?

There are no specific recipients for any Management Accounts. They are designed to be seen by those who need financial information about your business, but this will vary depending on the size and structure of your business. And of course who you want to receive, review, see and use this information. Management Accounts can be seen by anyone who has an interest in the financial performance of your business.

This can include:

• Owners
• Shareholders
• Board members
• Senior management
• Middle Management
• Junior Management
• External Accountants
• Tax advisors
• Investors
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These people will then be able to use this valuable financial information to make decisions based on the financial facts they are presented with.
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Why are Management Accounts so important?

Regularly analysis and discussion around the financial data in your management accounts is an excellent for ensuring the right decisions are being made for your business. Without Management Accounts, issues and trends within your company can go unnoticed often for long periods. This could lead to a lack of growth, poor profitability (or none at all) and poor decision-making. Having up-to-date and correct information on hand will help promote the growth of your business.
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Help Preparing Management Accounts

When it comes to preparing Management Accounts, having an external accountant like Kaizen on hand can help you to establish what’s needed, simplify the process, check on the accuracy as well as the detail and help with interpretation.

We can help you gather and present the relevant information and help you to prepare your:

• Balance sheet
• Profit and loss report
• Cashflow statement
• Analysis of your financial data
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We will also be able to offer practical business advice and support using these management accounts, identifying your market trends and helping you to make key decisions which have a much better chance of a successful outcome.