Grunberg & Co, one of London’s leading independent firms of accountants, is calling on businesses to appreciate the benefits of regularly preparing management accounts.
The firm, which recently moved to new offices in Colindale, says that the use of monthly or quarterly management accounts could help businesses identify areas of strength, as well as weaknesses.
“Conducted on a regular basis management accounts act like a health check-up for a business, showing where profits are fluctuating, or for forecasting potential cashflow problems further down the line,” said Robert Bean, Managing Partner at Grunberg & Co.
“Whilst a number of business managers often say that they find them unnecessary, by having the data at the ready, companies can make the most of new opportunities as they arise. In addition, the disclosed trends also can identify smaller issues, before they become major problems.”
Robert said that a good set of management accounts should include information such as profit and loss variances, balance sheets, sales reports, stock and inventory data, cash flow statements and defined key performance indicators.
“They say that knowledge is power and management accounts, certainly give businesses the ability to plan ahead more effectively, and react to problems quickly,” added Robert.
He said that management accounts can be beneficial in a wide range of circumstances. These include where business owners are looking to sell, expand, or to acquire a new company.
“Management accounts can also be offered to finance providers when applying for business loans or other products, often increasing the chance of approval,” Robert added. “This gives lenders additional comfort that the business is being closely and carefully managed.”
“With more uncertainty on the horizon for British businesses in light of Brexit, and other events, we can certainly see the benefits of having this level of business intelligence at the ready.”
“Thanks to online accounting and new software it has never been easier to collate and access management accounts, but it helps to have the expertise of a professional adviser who can interpret the data and guide business owners as they take their next steps.”
“Being confident in your decision-making capability at all times is the key to running a successful, flexible business – which is why management accounts should never be overlooked.”
At Grunberg & Co, we teach our clients a key mnemonic “SMART” – Succinct Management Accounts Reduce Threats.