Why management accounts are vitally important for businesses

It may seem obvious, and the clue is in the name, but management accounting reports can provide vital insights into the performance of a business.

But quite often they are underused by SMEs who may look more to financial reports to get an idea of how their business is performing or even underperforming.

How can they help?

Cloud accounting software has opened up a whole new world of financial information allowing businesses to easily keep track and identify trends in sales quickly.

Up-to-date information allows firms to plan for growth and make vital decisions quickly.

Results can be viewed in real time and businesses will be able to quickly identify potential problems, allowing them to take corrective action.

What should they contain?

Ideally, a package should include information, such as:

  • Profit and loss reporting
  • Balance sheets
  • Cash flow statements
  • Key performance indicators.

KPIs measure the effectiveness of a function within an organisation and are especially important for tracking areas like sales performance, how long it takes for invoices to be paid, identifying long-term problems and can measure team and management performance.

With regular management accounts, analysis can show business owners their financial performance and find trends that could help them with the future direction of their business.

Helping businesses to grow

Many online platforms can be used to assist in the creation of new reports, including:

  • When looking to sell, or acquire a new business
  • Looking to grow the business and expand
  • Delivering analysis and information to make changes to their strategy.

They can boost the chance of obtaining finance and could be offered to finance providers when applying for business loans or other products.

Need help with management accounts? Please contact our team today.

Business right caret

Small business confidence dips ahead of new customs controls coming into force

Four in 10 exporters have reported a fall in international sales since the end of the Brexit transition period, a major study has revealed. According to the tracker, four in 10 – around 41 per cent of traders – have reported a “drop off” in international sales in the three months to September 2021.

Business

Large number of businesses looking to recruit more staff

It is perhaps a sign of confidence returning to the UK economy that a significant number of British businesses believe they will be recruiting staff over the coming year.

Business

Spring Statement 2022 summary

Mr Sunak found himself addressing MPs against a background of crisis, with the residual impact of COVID, the invasion of Ukraine and the cost-of-living crisis all affecting the economy in different ways.

Business

Compliance right caret

HMRC asks sole traders to correctly report SEISS grants or “repay in full”

Sole traders who have not correctly reported their Self Employment Income Support Scheme (SEISS) grants may be forced to repay them in full, it has been warned.

Compliance

Making Tax Digital – what you need to know ahead of 2022-23

From April 2022 all VAT-registered businesses need to comply with MTD for VAT. MTD applies to taxpayers who file Income Tax Self Assessments for business or property income of more than £10,000

Compliance

Real-time online sanctions tracker to assist importers and exporters

Any business involved in international trade, whether importing, exporting or part of the supply chain supply to those firms, is faced with a rapidly changing regulatory environment.

Compliance

Economy right caret

Small businesses call for Government support to tackle climate change

According to new research, many are addressing energy usage, increasing recycling and investing in microgeneration, but only a third of those have a formal plan to tackle climate change within their business.

Economy

Hospitality bosses develop new strategies to cope with staff shortages

Hospitality business owners have responded positively to the staff shortages caused by the pandemic, by increasing wages and implementing improved staff retention strategies.

Economy

Everything you need to know about the new WTO Services Domestic Regulation

New World Trade Organisation (WTO) rules are set to cut the cost of global trade by billions of pounds every year, it has been announced.

Economy

Tax Planning right caret

Almost 800,000 tax scams reported to HMRC in past 12 months, figures reveal

Nearly 800,000 tax-related scams were reported to HM Revenue & Customs (HMRC) in the past 12 months, a major study has revealed. According to the report, HMRC responded to 797,010 referrals of suspicious contact from the public in the last year. Around 358,000 of these involved scams where taxpayers were offered bogus tax rebates.

Tax Planning

Be aware of tax liabilities if you are using cryptocurrencies

For those who have dabbled in the market, its important for them to understand that there may be tax liabilities with Captial Gains Tax and Income Tax, with any transactions whether with currency or other crypto assets.

Tax Planning

Did you use a Bounce Back Loan to cover personal expenses during the pandemic? Act now to avoid tax consequences

If you received a Bounce Back Loan (BBL) during the coronavirus pandemic and took the cash as drawings, there may be additional tax consequences.

Tax Planning