In the world of business and Management Accounts, there are three critical financial statements. Profit and loss (or income) statement, cash flow statement, and balance sheet. Together these documents provide valuable numbers that will help you track your company’s performance over time and give a snapshot into how successful or not it is doing financially at any given moment in time.
Numbers can represent many things, but they always tell the story of what’s going on with your business. And these data point to some significant trends. You’re growing steadily and consistently meet all forecasts – even those that were too optimistic. These numbers show us something new; how we spend our money matters both in terms of costs versus revenue and which areas need improvement if anything else is changed about them financially or otherwise.
For many companies, management accounts provide an in-depth and insightful look at the data. Of course, they should not be mandatory but they are invaluable tools for understanding your current performance as well as planning to make sure you’re still on track.
You need to keep track of your finances, and that’s where management accounts come in.
Management Accountants prepare monthly or quarterly sets of financial statements for businesses that provide clear insight at any given time. These are not legally required, but they’ll help you better understand how things work regarding your business finances.
For those using cloud accounting packages, such as Xero and QuickBooks. It’s easy to supply the necessary information so your accountant can produce management accounts without any hesitation.