Michael Sohor & Co is now known as Tamen Accountants. This is a name change only - we are the same dedicated team, and look forward to serving our valued clients for many years to come.
Management accounts got its name from being accounts that are intended for the eyes of the management of a business. Commonly, the managers are also the owners of the business. Unlike your end of year accounts, your management accounts don’t need to be shared with anyone outside the management team of your company.
We often get asked what the advantages of keeping these type of accounts are. Here are 10 reasons why management accounts can help your business succeed:
Management accounts are usually prepared at monthly or quarterly intervals. This means that you can monitor how the business is performing without waiting for your end-of-year accounts to be completed.
Each business will have their own Key Performance Indicators (KPIs) which are a good way to measure how the business is performing. Management accounts allow you to monitor these more thoroughly.
It is quite normal for the majority of businesses to have their earnings fluctuate throughout the year. You may have quieter times than others. Keeping management accounts will allow you to identify where these fluctuations are, and allows you to plan for them in the future.
Unlike statutory year end accounts, there is no legal framework for presentation of management accounts. You can tailor the report to look how you want it to look, and therefore make the reports relevant to your own business.
Typically, businesses which have prepared management accounts throughout the year are more organised simply because they have to be. Invoices are recorded properly throughout the year, which makes preparing the end of year accounts so much less stressful.
The discipline of regularly reviewing your financial records means that you are more likely to spot any irregularities. You will become more familiar with the reports and what they mean for you.
Management accounts allow for better tax planning throughout the year. Leaving tax planning to the end of the tax year makes it extremely difficult for us to help you save on your tax bill, but having this conversation earlier in the year we can do this much easier for you.
Read more about the importance of tax planning.
As your accountant, we want to hear from you throughout the year – not just when your end-of-year accounts need doing. Regular reporting allows you to be in regular contact with us, meaning we can raise any potential problems with you much sooner.
As management accounts are looking at shorter periods of time (one or three months), they can be produced relatively quickly. This is beneficial when you identify something which needs to be acted on fast.
Ambitious companies will use the information and insight they receive from management accounts as a way of encouraging its team to pursue goals. These could be growth targets, improved margins or to promote a new line of products or services. If the goal is reached, employees will be rewarded.
Anyone can call themselves a bookkeeper, or an accountant. Sadly (and we see this often), this is no guarantee they know what they’re doing! Our team is vastly experienced and highly qualified. You can be sure that we know what we are talking about, and all the key checks and balances have been carried out.
Ultimately, management information is only as reliable as its source. You need to be sure that your management accounts are checked over by a trusted advisor with the skills and experience that will truly add value to your business.
Contact us today to learn more about how we can help you.
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11th Jan 22 | Updates/ News
We recently changed our name to Tamen Accountants after many years of being known under...
31st Aug 21 | Tax Planning
Simply put this means structuring your business so that you minimise your personal tax bill...
31st Aug 21 | Management Accounts
Management accounts got its name from being accounts that are intended for the eyes of...
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