Management Accounts – what are they? Put simply, they are a compilation of management data, both financial and non-financial, which are often vital in the decision making process. These reports contain much more data than the Annual Accounts do, and don’t have to conform to accounting standards, and hence can be displayed in a way which suits both you, your business, and your decision making process.
So what is the importance of Management Accounts? As they provide detailed information, both on a financial level, but also on a KPI level they adequately summarise the performance of your business over any period of time. They also allow for comparison between periods and timeframes – which can often be vital in the decision making process.
In a post Covid-19 world, documents such as management accounts allow business owners and decision makers to review cash flow, future spending commitments, and reopening plans. This puts you in a much better position than “flying blind” which many business owners are at present.
Enough about what they do, but how can they help you and your business, when it seems like an additional admin burden? Up-to-date financial information is often required by Banks or Investors when assessing financial viability of companies, so why wait until you need to prepare them and not get into the habit of doing it monthly/ quarterly? In addition to this, they are also imperative for scenario planning from launching a new marketing campaign, to moving premises, or simply investing in new assets. By combining the perceived impact of the scenario with the current financial data, you are presented with a much more well rounded position from which to make your ultimate decision, knowing both the future impacts, but also, the impact on the current, core underlying business.
Here at Nimble Accountants we offer to prepare Management Accounts for you, and include a report on the underlying numbers helping you to interpret these more easily. We will work to your timescales, and are willing to prepare these whether they be monthly, quarterly, or any other frequency you desire. If this is something you would like further information on, do not hesitate to contact us.