As we touched on in Final Accounts, the traditional view of accountancy is the preparation and submission of annual accounts.
Of course this is a vital part of ensuring that compliance is adhered to and plays a useful role in reflecting on historic data and reviewing past events.
For those businesses who wish to make real time strategic decisions, management accounts are often the missing piece of the puzzle.
Management accounts are financial statements that are prepared at interim periods throughout the financial year, giving useful insights into turnover, cost of sales, expenses and overheads.
Clients often opt for these to be prepared on a quarterly basis. So with each quarter that passes, the data at your fingertips becomes more and more useful. Enabling you to compare the current quarter’s results with the prior quarter, or (in year 2) comparing Q1 of year 1 to Q1 of year 2, and so on.
Having data structured in this way enables you to better understand trends or seasonal fluctuations in sales, to uncover overspend or unexpected expenses in a more timely manner and even to be better prepared for taxation liabilities.
It also gives us much more time to implement tax planning prior to year end. For example, timely purchase of plant, equipment, setting up a pension schemes and maximising pension contributions for Directors to make full use of their annual allowances, investments in VCT funds and so on.
We've got you!
If you wish to discuss this in more detail, or you feel that your business would benefit from interim management accounts please get in touch to start your journey with us.