Management accounts is non statutory financial information generated for the business for internal use and helping management to know exactly how the business is performing. Emphasis or type of information produced is specially geared to reflect areas of interest to the management to enable them to effectively manage the business.
Different management accounting needs vary from one business to another and would cover the following areas of interest:
- the sales process – such as pricing, distribution and debtors
- Production Costs
- the purchasing process – such as stock records and creditors
- a fixed asset register – details of all fixed assets, including identification numbers, cost and date of purchase, etc
- Business Unit Performances Measures
Management accounts are produced at various intervals varying from weekly, monthly and quarterly based on recent historical performance.
The reports can also be projections based on past performance assuming certain conditions and would cover elements such as
- Profit forecasts
- Resource Demand
The analysis is usually performed against forecasts and budgets that have been produced at the start of the year – see budgeting and business planning.
We would do these for our clients for various reasons:
- Internal Use
- Bank Requirements
- Business Evaluation for Interested Parties or Stakeholders