The problem with annual accounts is that they deal with history. They tell you what has already happened some time ago, and perhaps too late to do much about it.
However, monthly or quarterly management accounts allow business owners to exert a far greater degree of control on their business, recognising and addressing problems and identifying opportunities soon after they arise. Many of our clients find the provision of this vital ongoing management information to be invaluable, giving them the ability to make effective and timely decisions.
What are Management Accounts?
Management accounts are produced monthly or quarterly depending on your requirements and provide far greater detail than the annual profit and loss statement. Sales of different products or services can be analysed and their contribution to profits highlighted and overheads can be allocated accordingly to show true departmental profit levels.
Who needs management accounts?
Any type or size of business can benefit from management accounts. Management accounts are particularly effective for businesses that wish to develop strategies and progress to the next level of development within a specific timeframe. Receiving information months after the event means you are less able to affect the course or direction of your business, whereas having the information as events are happening gives you the ability to implement effective changes. The need for management accounts is not always dependent on the size of your business but on the objectives you want to achieve.
How do Management Accounts benefit you and your business?
The production of timely, regular detailed financial information allows Harman & Co to act as your part-time internal accountant, helping you to identify any problems and highlight possible areas for increased profit.
Key benefits include:
• Control and understanding of your business’s finances
• Ability to plan your finances
• Ability to make informed decisions to drive your business forward
• Confidence to get on with running your business without the financial headaches
• Staying informed about the month-to-month development of your financial situation
• Finding existing problems as early as possible and receiving advice on how to deal with them
• Locating positive trends as soon as possible and receiving advice on how to capitalise on them
•A sounding board for any ideas you have
An audit provides a high level of independent assurance of the financial position and results of an organisation. This gives shareholders confidence that the reported performance of the business is accurate as well as providing external users with certainty that the accounts show a true and fair view. An audit lends credence to the company accounts in a number of ways:
• Provides assurance to the owners regarding the reliability of the information they are using.
• Ensures that the company’s systems and controls are working properly.
• Gives increased credibility to the accounts when raising finance.
• Gives increased credibility to the accounts when applying for or renewing credit terms with suppliers.
• Helps to protect the business from the risk of fraud.
• Increases the auditors’ ability to provide constructive advice in many areas of the business.
Some of our clients readily admit that they are so close to the day-to-day running of their businesses that they value the fresh perspective that our audit brings.
This added value can involve a new view on your company’s systems and controls, ways to ensure you get paid more quickly, enhancements to your management reports and more.
The audit not only points out problems that the management may have overlooked, but it also allows us to supply constructive advice and assistance in solving those problems.
Call Harman & Co today to discuss your requirements and receive a competitive quote.