As a business owner or decision-maker within a business, it is vital that you know how the business is performing. By the time you are reviewing your year-end Accounts, you are looking at historic data meaning it wouldn’t be wise to make future strategic and investment decisions based on this information.
To combat this issue, Management Accounts can be produced regularly to inform you of how well your business is performing. This information is crucial allowing you to understand current performance and compare it to prior periods. You are then in a position to gauge where you’re at and what action still needs to be taken to achieve your goals.
Many small businesses do not have the financial resources for an in-house accountant and so they are stuck trying to juggle the day-to-day running of the business alongside managing and reviewing business performance. Thankfully, there is a way to have management accounts regularly produced, without incurring the cost of another employee; that being to outsource the service to a cost-effective accountant like Page Ivy.
Although there is no legal requirement for you to prepare management accounts, this service can a major factor in the sucess of your business. Sadly, we have seen too many businesses suffer from nasty surprises when reviewing their year-end accounts, management accounts highlight any pertinent issues much earlier on and allow you to nip any potential issues in the bud.
Management accounts can be prepared to cover any period, but most commonly are monthly or quarterly.