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What Can Management Accounts Do For You? An Overview
Know how much profit you have made, what factors influence it and what you can do to improve it
No nasty surprise tax bills. Understand what your projected tax bill will be, allowing you to reduce it or save for it.
Knowing where your incomes & expenses currently are will allow you to accurately project the future. Crystal ball technology at your fingertips!
Management accounts allow you to take action BEFORE and not AFTER ensuring you get the best results.
What Can Be Included In Management Accounts?
Profit & Loss Accounts
These consider the income, minus the cost of goods sold (i.e products bought for resale and/or made), the expenses (premises costs, office costs, vehicle costs, staff costs etc) and any other relevant matter
This is a statement of all the assets and liabilities of the company as well as the capital. It gives an overall idea of the companies financial strengths and weaknesses. On a day-to-day basis its nowhere near as valuable as a profit & loss account and the cashflow report.
Knowing where the company is today and where it will be in the next 30-60 days (with extreme accuracy) and where it will be in a years time approximately allows you to form strategies for tackling cash deficiencies as well as allowing you to foresee any capital investment opportunities (i.e new vehicles, plant and machinery etc)
Profit & Loss Projections
It's all very well knowing the historical perfomance of you business, but what about the future, where is it going? A projection can act like GPS allowing you to plan your journey in business, fine tuning it as required.