The Importance Of Management Accounts
DBASS Blog | July 2022
Whilst traditional year end accounts can give business owners financial information, they are by their nature historical and may not give a true reflection of the current state of the business.
Producing monthly or quarterly management accounts can give business owners vital up to-date, accurate information to allow them to make informed decisions. This information essentially allows owners to be pro-active rather than re-active to current trading levels.
Here are 4 great reasons to use management accounts:
- Management accounts can highlight trends and area’s that may need attention, such as sales falling off on a month on month basis or costs rising consistently.
- Knowing your profit month on month can assist a business to plan their tax more efficiently, such as making pension payments before the financial year end or paying preliminary tax for current year profits.
- A natural outcome of management accounts is that it gives a focus to the financial department to have the bookkeeping of the business kept up-to-date and therefore there should be no backlog in processing and no nasty surprises of unpaid taxes, customers not paying or a long list of suppliers not being paid.
- A business does not have to invest vast sums to produce management accounts as there are templates built into bookkeeping software packages that the business is most likely already using. These templates can be tailored to produce detailed relevant information for any business.
Management accounts are mostly informal in nature but are a vital tool for any business.
Talk to DBASS today about how using management accounts in your business could make a real difference.
By Daniel Blair
Accounts Services Manager
DBASS Chartered Accountants
This article is for discussion purposes only. For further information on any of the topics covered in this article please contact a DBASS adviser on ph. 01 849 88 00.