The timely and prompt preparation of accounts requires several managerial tools, significant of which are the management accounts. They are custom-tailored to meet specific management objectives. They include both financial and non-financial information and data with a frequency of monthly reporting.

These accounts allow an early and detailed review of individual accounts, comparing past performance with current performance and with budgets or financial projections, ratio analysis, percentage changes, and other different types of analysis. Management then reviews these results to find out strengths and shortcomings, which enable them to adjust their position accordingly. The analytical process can shed light on new business dimensions not previously considered. Therefore these accounts are considered an actual value addition tool for the management.

Innovative businesses rely on managerial tools that make financial information and management accounts on a timely basis which helps businesses in the decision-making process. The management accounts are designed to meet these specific management objectives.

Preparation of monthly accounts, unlike the annual requirements, is not a statutory requirement but is vital for the success of a business. The format of these accounts is laid down as per management’s requirements. They include in-depth financial and non-financial data, information, and business insights which the management can use to its extensive advantage and help. Therefore, management accounts would make businesses capable of making prompt decisions making. Another advantage is that management can monitor business and transaction fluctuations and help the systematic flow of the business in a more organized way.

Another advantage of these managerial tools is that these management accounts are prepared every month, which enables businesses to have a clear picture of the different components of their business, for instance, sales, predictions, profit margins, analysis, evaluation, review of past performances and many more. The benefits of qualified professionals are that they have a good understanding of different businesses and transactions whose expertise can exceptionally be helpful for sound support and business analysis.

Disclaimer

The difference between management accounts and financial statements is that financial statements consist of the current period and up-to-date income statement/profit and loss account, sales, expenses, creditors and debtors’ position, inventory, and actual and comparative data on profit. They are more specifically designed to meet the regulatory requirements. However, the annual financial statements become the basis of determining the taxable income and the final tax liability.

Financial accounting and management accounting offers tremendous benefits to the business and the owners, whether it is a monthly or an annual phenomenon.

While any financial information is useful for business success, control of costs, and determining business profitability, monthly management accounts can provide larger insights to businesses because they are prepared monthly and provide more information that can help prompt decision-making.

All of this suggests that businesses should have a full-fledged accounting and finance department. Often for small businesses, the cost of setting up a full-fledged accounting function quickly outweighs the benefits associated with it.

Care Accountancy can provide a solution in the shape of outsourcing services which can help businesses tremendously. All management accounting services aim to have access to prompt information that they can use for the decision-making process of the business. Our qualified Chartered Accountants and experienced team of Accountants can help you and your businesses to:-

• Prepare management accounts according to your requirements
• Budget preparation
• Measure business performance
• Analyse sales, expenses, and exercise controls over cost
• Compare actual performance with budget and industry averages
• Identify market trends and fluctuations in sales and expenditures
• Highlight key areas where strict controls are needed
• Analyse financial and non-financial performance indicators
• Estimate future costs, liquidity, and tax liabilities
• Assist in VAT forecast
• Help to improve decision making and performance

We can work closely with you and your staff to produce monthly or quarterly management accounts as per your business requirements. This work would give you an accurate overview of your business positioning. This ultimately enables you to recognize and pick out the problems early to initiate immediate actions and solutions and assist your business through tax benefits and tax reliefs. etc.

Suppose a business cannot prepare management accounts, or it is not cost-effective to maintain an accounting function. In that case, it makes business sense to outsource this function to a third party well versed in dealing with accounting matters. This is where the services of qualified, certified Chartered Accountants could come in handy. Outsourcing can enable unruffled and uninterrupted activity to access updated and accurate financial information quickly.

Outsourcing this service is much more convenient and cheaper than the in-house finance department. Business owners can concentrate on business growth sales and address other teething problems which small businesses are generally prone to. This service provides an efficient, effective, and successful way to handle business.

More and more UK businesses have now started to outsource this vital function to accounting firms, which have realized its importance and immense benefits to the business. Outsourcing offers a cost-effective solution to avoid the astronomical costs of setting up an in-house accounting function.

Outsourcing management accounts service is the need of the hour. It offers businesses a bundle of opportunities, e.g., business owners can avail themselves of ample spare time to generate more income. At the same time, Accountants look after their daily tasks in depth. The absence of this service would let businesses work harder spend more time and effort to achieve their business targets and goals.