Management Accounts help you improve your business performance

First of all lets get rid of the jargon. NGM Accountants is a jargon free zone.

Management Accounts are accounts that are prepared during the year to help business owners and managers to find out if they are on track compared to their plan and forecast. (for a more in depth explanation check out our advice page).

Sometimes they are prepared monthly but very often 3 monthly is quite adequate. Management Accounts are essentially a mini set of accounts but designed and presented in an easy to read and practical, useful format. They will often compare current year's performance with last year and / or with the plan for this year. Some of our clients ask for the management accounts to help them decide about product ranges, market sectors and business divisions and so we produce accounts for each of these subdivisions of the whole business.

It sounds complicated - and they can often be quite complex to prepare - but when

we present the results, they are simple to read and to understand. We use graphs and tables, pictures and explanations in plain English. After all, you need information to make decisions, and that's what we give you.

Do you know how your business is doing right now?

We have one client, who operates a medium sized manufacturing business turning over about £1m and the MD - we'll call him Gary for now - insists on using just three things to measure his success with:

Trade Debtors balances

Trade Creditors (suppliers you owe money to)balances

and his Bank balance.

I can understand why we did it but when it comes to making decisions about investment in new products or services, cost reduction plans, understanding why margins were moving in a particular way or figuring out how much Tax he should be setting aside based on profit, there is no substitute for proper management accounts.

Ask yourself this: "Do I know the answers to the following questions to within a +/-10% degree of accuracy?"

1. How much profit did I make last month?
2. Was my gross margin better or worse than I should expect?
3. What is my overall working capital position?
4. Am I going to need more working capital in the next three months?
5. What is it that I do that makes me most profit?
6. Is there anything I do that is loss-making and if so, should I keep doing it?
7. Are the assets in my business working as hard as they can?

These are just some of the questions you should be asking yourself - the easiest ones!

If you don't know the answers but think you should, you should contact NGM Accountants now to get the complete answers.

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