Be it trying to decide when to take on the next employee, or whether to relocate to new premises, to the more fundamental matters of whether to steer your focus to cutting down your costs, or growing your sales demand, the one constant you need across all of these variables, is up-to-date financial information. Try to make informed decisions to benefit your business without such information is a receipt for disaster.
Regular management accounts, comprising of the most basic information such as a profit and loss statement and balance sheet can give you a real-time indication of the performance of your business, and place you in a stronger position to make the right call.
There are no set standards for preparing managerial accounts and any business can design their own style according to their operation and business needs. There are several benefits associated with these accounts. They can help you identify who your key customers are by turnover and see which customers are actually the most profitable. This could be used to target your selling, increase turnover and improve profit, something you can’t get from your standard annual statutory accounts. You could alternatively look at overheads to identify possible savings. This can help to flag up areas where you might be incurring regular or unusually high spend.
Over our years of experience, we have sat down with business owners after their financial year end to go over their accounts before submission, to discover that they were unaware of reducing profits and soaring overheads. All too often they indicate that being aware of this during the year would have meant that they could have taken action to minimise the impacts on their business.
The benefits above are not an exhaustive list, and our team at CMA can help you to develop a set of management accounts to arm you with the financial information you need to understand your business on a deeper level. An all singing and dancing package that suits a major corporation likely won’t suit a smaller business. Whilst management accounts are a key tool to help with your business, you need to make sure the tool is fit for the job!
Get in touch with us if this is something you feel would benefit you and take a step in the right direction to evolving your business today!
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