Management accounts

Whilst not compulsory, management accounts are an invaluable tool for helping managers within organisations obtain information with which to make informed, timely and meaningful business decisions. They will allow directors to be better equipped in management and control functions.

Account reviews include:

  • the sales process – including pricing
  • distribution, debtors, creditors and the purchasing process – including stock records
  • a fixed asset register – details of all fixed assets, including identification numbers, cost and date of purchase, etc
  • employee records

Uses of management accounting

It is hard to run a business effectively without management accounts. Companies should produce them regularly – e.g. monthly or quarterly as they enable a business to:

  • compare accounts with original budgets or forecasts
  • manage resources better
  • identify trends in the business
  • highlight variations in income or spending which may require attention

Maintain records

  • recording business transactions
  • measuring results of financial changes
  • projecting financial effects of future transactions
  • preparing internal reports in a user-friendly format

Plan and control

  • collecting cash
  • controlling stocks
  • controlling expenses
  • co-ordination and monitoring of strategy/performance
  • monitoring gross margins

Make decisions

  • using cost information for pricing, capital investment and marketing
  • evaluating market and product profitability
  • evaluating the financial effect of strategies and plans

Contact taylorcocks now to see how you can benefit from our management accounts service.