It can be argued that smart planning is the key to running a successful business.
Relevant and up to date financial information in the form of management accounts are crucial to making the best decisions possible that enable you to plan ahead effectively, a very useful tool in the proverbial business toolbox!
With a high percentage of businesses failing within the first five years, it is worth noting that producing only statutory financial reports just at year end is often not enough.
Weekly, monthly or quarterly figures can give you a clear indicator of performance suited to your businesses needs allowing for finer control and an accurate picture of financial performance. Figures can be compared against budgeted/last month/quarter/year’s figures to improve margins, boost productivity and help with budgeting.
Management accounts can also help with business cashflow, offering insight into areas which can be improved or cut out.
Not only do management accounts provide insight to those within the business, they are also your ticket to business growth through investment via external lenders such as banks or investors who will be looking for reassurance that your business is financially stable and competently run.
To summarise, management accounts can:
Give you back financial control
Enable you to plan ahead
Help you make better business decisions
Improve margins, cashflow & budget
Help with business growth & investment