Better financial management

Management accounting helps organisations make informed business decisions. Focusing on the present and the future, it’s all about planning, evaluating and controlling business operations and performance.

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The Benefits

Management accounting offers critical insights into a business’ financial wellbeing.

A smart mix of planning, monitoring and analysis tells a business what is happening now and helps it decide what to do next.

By contrast, statutory accounting only shows what happened in the past, often without the context or detail needed for decision-making.

Management accounting can be just as valuable to small businesses as it is to larger corporations.

Let’s take a look at some of the benefits.

Financial reports being studied by one person at a desk

Planning Ahead

Budgeting encourages businesses to focus on the future. It helps them set detailed, realistic plans for:

  • Sales targets

  • Production levels

  • Material and overhead costs

  • Cash flows

  • Staffing

  • Investment and borrowing

  • Capital expenditure

The plan specifies what a business must do to achieve success.

It establishes targets and KPIs, serving as a set of benchmarks against which actual results can be measured and compared.

Costing and Pricing

A good plan establishes the cost per unit of a business’ output. This might be a cost of production, service or a specific job.

Costing accounts for the direct materials, labour and expenses, as well as fixed and non-production overheads.

This helps businesses set competitive selling prices and realistic profit expectations.

Performance & Control

Your bank balance is not a reliable indicator of financial health. It tells you nothing about future transactions, market conditions or how well you have done.

To do that, you need to measure ongoing performance and control your resources, including cash.

Performance is measured by comparing actual results to the targets set out in the budget, typically every month.

This analysis can pinpoint where and why a business is succeeding, highlight further opportunities, and show where it is facing challenges.

A process like this will ensure that a small business knows precisely how well it is performing and what it should do next.

Subsequent business decisions and corrective actions are then incorporated into the rolling forecast, which anticipates future results based on in-year performance, decision-making and changes in trading conditions.

Real Time Reporting

Ongoing analysis can be performed and reported as frequently as required. Depending on the nature and needs of the business, this can range from live information feeds to daily, weekly, monthly or quarterly reporting.

Access to up-to-date information helps businesses swiftly identify and respond to adverse operating conditions, limiting potential damage, and enables them to capitalise on fresh opportunities.

Reporting will typically include a set of financial statements, budgetary assessments, a forecast and other business-specific analysis.

Cash & Resource Management

Cash flow problems are a common cause of failure for small businesses.

Management accounts give businesses full control over their working capital. By managing their supplier payments, customer receipts and inventories, businesses can optimise their cash flows.

Potential shortfalls can be identified and addressed before they arise. Periods of surplus can be put to best use, and investment decisions become easier.

Staff and other resources can also be managed in a similar way.

Informed Decision Making

The insight and control offered by management accounts ultimately help businesses make better, informed decisions. These might be strategic decisions, short-term decisions or even decisions about allocating limited resources.

Examples that small businesses might face include:

  • “Which new market should we enter?”

  • “How many units do we need to make and sell to break even?”

  • “Should we finance a project with debt or equity?”

  • “Should we pay out dividends or reinvest profits into the business?”

  • “With limited funds, which option is most favourable between competing projects?”

  • “Should we make, lease or buy an item?”

  • “How do we reorganise production to maximise profit when much of the workforce is off sick?”

  • “Should we carry out a task internally or outsource it?”

  • “How and when should capital assets be replaced?”

  • “How can we reduce costs, and by how much?”

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Our Service

We’re experts in management accounting, and our accountants have decades of experience in serving small, large, public and private organisations.

Our service is fully tailored to your organisational preferences and needs.

We provide budgeting, reporting and forecasting as standard, with additional services available wherever they may be relevant to you.

We’ll take you through a business planning cycle to set your budgets, determine your data requirements and implement appropriate controls.

Management accounting depends heavily on transactional data, both financial and operational. We will help you determine the best ways to collect, manage and share the information you need.

A full suite of forecasts is provided to help manage your income, expenditure, balance sheet and working capital.

We’ll produce regular management reports that evaluate your business performance in detail. We’ll also hold finance meetings with you to review the information, offer advice and update your forecasts.

What’s included?

  • Business planning & budgeting

  • Rolling forecasts

  • Performance evaluation & variance analysis

  • Comprehensive management reports

  • Management chart of accounts

  • Analysis by responsibility centres

  • Cash flow management

  • Operational activity monitoring

  • Custom information systems & tools

  • Costing

  • Pricing

  • Cost–Volume–Profit analysis

  • Financing decisions

  • Investment & project appraisals

  • Capital rationing

  • Short-term decision making

  • Cost improvement programmes

  • Ongoing technical support & advice

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Why Choose Us?

Fixed fees

Affordable fixed fees agreed upfront with no hidden charges or surprises. We also offer flexible payment options to make things even easier.

No jargon

Just polite and clear communication in plain English, all the time. No misunderstandings. No confusion.

Expertise

We’re experienced, qualified chartered accountants. You can trust our advice to keep your tax bill down, ensure full compliance, and help drive better business performance.

Proactive

We’re a helpful bunch, providing everyday support and are always ready to quickly respond to your queries. We keep in touch, keep you informed and keep you nagged about upcoming deadlines!

Partnering

Getting to know your business inside out and building a collaborative relationship are key to getting the most from our service. We’ll meet you regularly throughout the year (not just at the start and end) and keep in touch in between.

Personalised service

All our services are shaped around your specific needs, preferences and budget. This ensures you receive the best value, the best advice and the best outcomes.

Call us today on 0203 576 6000 or send an email

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In addition to preparing financial statements for both statutory and internal needs, we help small businesses implement the underlying systems and practices.