Information bolsters your decisions; there’s no getting away from that fact. It’s the reasoning behind management accounts, which aim to quantify the performance of a company, so it can make better choices with the right financial data at its fingertips. Anyone who doesn’t use management accounts will be losing out on key, powerful metrics of how (and how not to) run a business.
Nabarro Poole offer a full range of accounting services for our clients – whether they’re a startup or SME. Management accounts is certainly one of them. Let us explain why it’s so important, even when you’re starting out small.
Putting a number on success
A typical management accounts service, if you aren’t already aware, is presented by your accountant at regular intervals throughout the year. It is the result of a deep dive into your corporate finances – what you’ve earned, how the balance sheet looks, where investments have paid off, and the overall takings of the business before and after tax.
Really, it’s hitting every angle of your financial model. The initial data set is the groundwork for whatever follows; you have a benchmark for what is selling well, what isn’t, and what costs are eating away at your profit margins
Management accounts are especially useful for ventures with a lot of incomings and outgoings to juggle. Since you’re trying to distribute resources effectively, the report can unveil where the most profitable areas of the business are. Then, with accounting advice, you can work out what you need to change to maximise earnings, or rescue an element that is struggling.
Gauging cause and effect
Over time – whether it’s every month, quarter or as an end-of-year review – the management accounts data will inform how you, and other decision makers in the business, will move forward.
Could costs be streamlined? How is cash flow faring? Does one product seem to offer more value than another, even though the second is taking up the majority of your resources? These are questions that a management accounts evaluation can answer. Hard evidence is tough to dispute. From it, we can derive a course of action, and compare the results of subsequent reports to see whether those changes have been successful.
No matter what size your business, there’s every reason to use a management accounts service. For one, it gives you empirical verification of what’s working, ensuring your business has a unified perspective on financial matters. But there’s another benefit when you establish a template for how to test and measure performance – your team will have a common set of results to guide them.
Growth can happen faster than you may anticipate; having a directive for other authorities in the business will ensure that everyone is singing from the same hymn sheet, tying your vision together. It’s also a boon for investors who want to retain confidence in your performance.
Nabarro Poole are the dedicated team you need for thorough and regular management accounts. Contact us to learn more – we’d be happy to explore where your current accountancy practices could benefit from a boost.
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