What are Management Accounts?
Management Accounts are the ongoing and regular process of documenting, reconciling and calculating your accounts to ensure that they are correct and up to date. These can be done weekly, monthly or quarterly but we would suggest that the best practice is to do these as a monthly task.
How will monthly management accounts help my business?
If you keep your accounts up to date and make sure that these are checked off every month, you will be able to keep track of the finances of your business. You will be able to track any growth or expenditure and plan changes according to the facts.
Keeping a close eye on the numbers is just good practice for managing any business. You will be more likely to pick up any issues that may otherwise go unnoticed and you can take action based on your findings.
When you prepare management accounts every month you will have a greater understanding of the finances of your business. You can track when and where your money is being spent and you can start to collate a list of the expenses that aren't necessary.
When you are a new business just starting out it can be easy to focus wholly on the business and forget about the accounts. This is a mistake, keeping on top of your business finances from the beginning will keep your cash flow running smoothly right from the start.
Getting ready for your End Of Year Accounts
If you are a limited company then you are required to submit your end of year accounts to Companies House at the end of your financial year. Staying on top of your monthly accounts will ensure that you are ready for your year-end. Your monthly management accounts will also give you some indication of how much money you should be saving up for your corporation tax bill at the end of the year.
If you would like to speak to a member of our dedicated team in Bexhill then please get in touch. We can help with everything to make sure you put the systems in place to effectively manage your monthly accounts.