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What Are Management Accounts?
Management accounts are usually defined as a set of summarised data for accounting purposes.
This can include things like a balance sheet, income statements, cash flow and so on.
These are prepared on a regular basis and are made specifically for the company’s management.
The point of management accounts is to give important financial information and statistics that can be used by managers to make decisions for the company.
Accounts Receivable Management
Accounts receivable is money due to you from customers that have received their products and services but yet to pay.
It is essentially the money that is owed by customers to a business and is one of the major data components of a management account.
Accounts Payable Management
Accounts payable refers to the procedures that are carried out by a company with respect to managing trade purchases.
For instance, if you’ve submitted purchase orders to a company for supplies or if you’ve financed a relatively large purchase, then it’s required to calculate the money that you should be paying to companies.
This will usually be located on a balance sheet and is taken into consideration when reviewing management accounts.
Xero Management Accounts
Xero provides an online accounting software solution that connects you to banks, accountants and a huge range of businesses.
It’s one of the most trusted online accounting tools around and it has helped millions of businesses thrive.
In addition to helping you manage your day-to-day business finances, Xero has an option to create reports based on the data that you have accumulated.
This helps you make critical business decisions and also helps with your management account preparation.
Xero makes it simple for you to assess the health of your finances.
You’ll save a lot of time when making difficult decisions in the future because you’ll have access to a wealth of up-to-date data.
Sage Management Accounts
Sage is another software company that offers a wealth of financial features like integrated accounting, payroll management and payment systems.
It’s used by many companies around the world and it provides transparency as well as easy-to-use tools for regular day-to-day accounting such as invoicing.
Due to all the information that flows through Sage, it can also be used to create comprehensive reports and prepare a management account to help you make crucial business decisions.
Benefits of monthly management accounts
Universal Accounting provides a wealth of different financial and accounting services and one area we specialise in is the preparation of monthly management accounts.
- Company owners have full transparency of their financial situation.
- Make informed decisions to steer their company to success.
- Up-to-date report of the month’s finances for your business.
- Better understanding of the direction that your company is headed
- What areas of your business you need to improve or focus on.
- Management accounts are also useful for preparing a business case for lenders.
- Help to convince lenders that you’re a suitable candidate for funding.
Management accounts are also flexible in how they’re created and can easily be tailored to your exact needs.
How We Prepare Management Accounts
To prepare management accounts, we include a number of different sources of information.
Since management accounts can be customised to your needs, this will also depend on what your requirements are.
However, in general, we’ll take data from both your expenditures and income.
Expenditure reports first need to be as accurate as possible to ensure accuracy within your management accounts.
Once the reports have been assembled, we’ll review all of the purchases, how they were purchased, if a line of credit was used and so on.
Each of your business’s departments will likely have their own documents detailing their expenditures as well, such as accounts payable and payroll information.
Next, we’ll compile data on your income.
This includes money from sales, income gathered from lenders, crowdfunding and so on.
Understanding how you generate your revenue and from what sources is important in creating an accurate management account, so it’s vital that you’re able to produce reports which detail all sources of income.
Included in your management accounts.
A record of the health of your business at a particular point in time.
This includes the assets you have, current liabilities, debt and shareholder funds.
Your assets will usually include fixed and current assets, stock, debtors and cash.
A profitable business can still end up bankrupt if it can’t afford to pay for upkeep expenses like bills and salaries.
A monthly management account will include your budget, historical figures of your cash position to see how well your business has been doing over time.
And how much money you can expect to receive from clients that have yet to pay you for services.
Once we have all the information required, we’ll compile it into a single comprehensive report that covers your business’s entire financial situation.
How Are Management Accounts Certified
Management accounts are certified by a certified management accountant.
The certification lets you know that the accountant has the right qualifications and knowledge to create a comprehensive report on your business’s financial situation.
Management accounts are prepared in a variety of different ways and we can personalise your management accounts to your liking.
If you want to understand your business’s financial situation or make an important financial decision, we can help.