Management Accounts help make day-to-day management decisions easier. They have a short term focus as well as helping predict future long term outcomes. It is a combination of business skills and techniques applied to the numbers. Simply seeing the financial reports at year end won’t give you the answers you are often looking for. Management Accounts are often used to develop strategy and monitor risk areas of a business. It is very focused on improving the business rather than producing a set of accounts to meet legal requirements.
The aim of Management accounting isn’t a focus on external parties to meet their needs; it is predominantly to generate reports for the internal stakeholders such as CEO’s, GM’s and directors to make real time decisions.
Reports can vary and help you answer some common questions such as:
- How much cash is available at hand for use?
- What’s my total revenue and sales generated from last week or last month?
- Where our debtors standing? What’s outstanding?
- How quickly am I converting my sales to cash?
- How are we tracking to our budget and what’s causing the variances to achieve my targets?
- If I carry on this way, where will I be at the end of the year? What do I need to do to change my year end result?
Cost accounting is used to make decisions for planning and controlling within an organisation. It is a way of accounting for all costs relating to an activity or a purpose. The information collected is then used for analysis to arrive at selling prices or determination of savings.
Techniques can be used for allocating overhead costs through the use of job costing systems. These may include analysis of certain behaviours of cost such as looking at operational and capital budgets, variance analysis, standard costing; activity based costing, cost volume profit.
Contact us for a free consultation, and we can help you identify cost savings.
Knowing the past performance is useful for reporting and ensuring you meet your tax and accounting legal duties. Knowing the future performance or at least understanding the driving factors of your current and future trends, enables you to change the story your company will tell in the short or long term. Forecasting takes the big picture scenario into consideration.
We can help you forecast quarterly or monthly depending on your needs, and we can even help you set up your budget from the start of the year and help with rolling forecasts to keep you on track.
We take a look at your business performance, and help you to make achievable plans.
Budgets are like goals with constraints. Much like the New Year’s resolutions one might set themselves at the start of the year, for a company, they help you keep track of your company’s future plans. Generally, companies will do annual budgets and use forecasting to measure the budgeted performance against regular forecasts. Having a budget will help control costs and ensure that the business has set plans in place to navigate through the up’s and downs of the markets.
Contact us, and we’ll help you create a roadmap for your future! We can nicely tie in a package that will help you keep on top of your budget with added forecasts, giving you a better view of how you are heading.
Cash flows is understanding how cash is generated by the business and how this cash is spent by the business. The resulting figure is the net cash of the business which is NOT equivalent to the profit or loss of the business. That is why a business should always understand where their cash situation is.
This net cash is equivalent to the cash at the bank and the cash on hand of the business as given in the Balance Sheet.
For management purposes, it is vital that cash flows are managed closely. We can help prepare cash flow budgets and models to suit your needs and help you keep on track.