Management Accounts

What are Management Accounts

Management Accounts are a set of financial statements, prepared periodically (typically monthly or quarterly), allowing business owners or directors to understand the financial trading position of the business and make decisions based on the data. These usually include graphical analysis, profit and loss account, balance sheet, cash flow statement and a short report.

Why should a company prepare Management Accounts?

The work may be considered an unwanted administrative chore or simply a cost for the business. Whilst some administration work is required, the preparation of management accounts is work that should allow informed decisions to be made throughout the year, leading to improved performance, and will also form the basis of the annual results.

What are the benefits of Management Accounts?

  • Business control - Management will be able to identify operating trends & key performance indicators (KPIs) in enough time to take action to improve performance.
  • Tax planning - With up to date information, owner-managers can plan dividend payments in the most tax efficient way.
  • Reduced accountancy costs - Close attention to the accounts reduces year-end accountancy costs.