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FACT!
Not having regular up to date, accurate Management Accounts is one of the main reasons that Irish companies find themselves in financial difficulty
Fact!
Business owners and managers who receive timely, accurate financial information on how their business is performing can make decisions quicker and identify potential business risks before they become full blown problems.
Business Hints & Tips
Management Accounts - Why we need them?
- Management Accounts give you visibility on how the business is performing
- Improved control over key the business
- Better decision making
- Management Accounts allow business owners and managers to focus their attention on the areas that need it most.
- Less uncertainty about the future
- Facilitates setting a budget and measuring performance against it.
What are Management Accounts?
Management Accounts give business owners and managers information on the financial performance of their business and identify what areas of the business are performing on target and what area’s are under performing and need to be addressed. Management Accounts can be produced monthly, bi-monthly or quarterly.
With regular management accounts you can clearly see where the problems are before they become critical to the business.
Management accounts are prepared by an experienced accountant and presented in a clear format to business owners and managers. The accountant should interpret these numbers in easy to understand language as many business owners and managers are non financial people. The accountant is there to act as a soundboard and partner to the business owner offering advice and guidance when needed.
Management Accounts consist of three main financial reports:
- 1Profit & Loss account,
- 2Balance Sheet
- 3Cash flow Statement.
They will also include other reports such as:
- A list of customers, the amounts due and when they are due for collection.
- A list of suppliers and the amounts owed and when they are due for payment.
- A breakdown of amounts due to the Revenue and when they are due for payment.
- Sales analysis and margin analysis that tells you what products are performing best and how profitable are these products. Stock analysis report.
- Wages analysis report.
The Management Accounts should be tailored to suit you the business owner.
Management Accounts forms one part of your financial requirements. Other key areas are: