Whatever works best for you and your business works for us! We work with our clients in a variety of flexible ways, including working from your office, or working remotely from our office, and attending your management or board meetings wherever we can make a difference.
Management accounts are vital to your business as they not only tell you how your business is performing now but give an indication of how it will fair in the future.
Key performance indicators
Every pack of management accounts we prepare will have personalised key performance indicators (KPIs). We work with you to identify the key areas which tell the story of your business.
The most common KPIs are:
- Sales – we can monitor your sales trends and compare to previous years. If your sales suddenly increase dramatically this could highlight the need for additional short term funding.
- Gross margin – if your sales increase but margin falls, you could be working harder for less profit.
- Wages as % of sales – are staff costs increasing more than sales?
- Bank balance – we monitor the movement of your bank accounts and compare to previous years. We can also help you with cash flow management to make sure you are able to meet all your Inland Revenue payments on time.
- Debtor days – this is a very useful number as slow paying debtors have a negative impact on your cash flow.
- Creditor days – it’s surprising how many businesses pay their suppliers quicker than customers pay them. The impact on cash flow can be quite dramatic.
- Stock balance – if you are holding too much stock, this will affect your cash flow. It’s important to monitor and make sure you’re not tying up cash in stock.
We prepare an annual comparison profit & loss account. This shows your current year’s profit forecast compared to previous years.
Profit and loss account
We prepare quite detailed monthly profit and loss accounts which show:
- The current month compared to budget
- Year to date compared to budget
- Year to date compared with last year to date
- Full year forecasted income, overheads and profit
We investigate and explain all budget variances and update the full year forecast as necessary. It’s always our aim that the full year forecast will be what we are actually expecting the business to do rather than how we hope it will perform. This is vital if you need help with tax planning (you can’t plan if you don’t know how much profit you are going to make).
All our management accounts include a detailed balance sheet. We reconcile all balance sheet items every month and investigate any unusual movements.
We monitor your net assets and compare to previous years to see the growth.
Most of our clients want a record of how much business each of their customers did with them each month. This can be useful if certain customers use you sporadically – you will be able to contact them at the right time rather than randomly. You can also clearly see if any customers have stopped using your services – this may prompt you to contact them.
We include a full finance report with all our management accounts.
This is always written in plain English and we avoid any financial jargon which could be confusing to non-financial directors.
The finance report is tailored to your needs – some clients want a detailed report whereas some want just a single page of the key business highlights.
We use graphs throughout the report to show trends – this in turn can help prevent future anomalies.