Financial management accounts & information

Management accounts are financial  reports that provide the tools for management and business owners to better execute day-to-day decision making and create strategies which will improve business performance. 

Management accounts are typically produced monthly or quarterly and contain both a Profit & Loss and a Balance Sheet. Additional financial reports are then included, such as an outstanding receivables/payables report and a historic cash flow summary. 

Management accounts help to provide direction and  visibility, which are critical for businesses to reach their goals. 

Simply put, the information provided by management accounts is specifically designed to inform management on how each part of their business has been performing and thereby guide decision making to benefit the future performance of the business.

1. Measures past performance as a basis for improving future performance
2. Helps anticipate cashflow problems and manage liquidity
3. Visibility of business performance
4. Identifies focus areas
5. Grow your business
6. Make more informed decisions based on up to date information

Regular management accounts are essential to your business in helping you to monitor performance. But what  should they contain? 

They are not a legal requirement so there isn’t anything that is compulsory, but they’re business specific so typically they include the financial reports that are of most importance to you. 

Generally speaking, you would expect to see the following within a management accounts pack:

• Profit and loss (with comparative periods)
• Balance sheet
• Aged receivables report
• Aged payables report
• Historic cashflow summary report 

In addition to the above, management accounts lend themselves nicely to budgets and forecasts so you may  see these reports included as well.

Management accounts are a financial report, produced regularly, that provide the tools for management and business owners to better execute both day-to-day decisions and create strategies which will improve business performance.

Year end financial statements are a summary of an organisation’s financial activity over a 12 month period. They are prepared for Companies House and HM Revenue & Customs every year and consist of the Balance Sheet, the Profit and Loss Statement, and detailed Notes relating to the activities of the Company.

In principle, management accounts are similar to year end financial statements but the key difference is they are less formal, produced more regularly and can be personalised to management’s requirements.