Successful businesses are only as strong as their strategies. Monthly management accounts can provide a business with a detailed breakdown of exactly how their organisation is performing – enabling them to set targets, foresee problems and shape a perfect business strategy.
Naturally, a business with little knowledge of its strengths, weaknesses and how it is performing on a daily basis will struggle to react appropriately to any unforeseen challenges which may arise. Equally, without a sufficient overview of the ins and outs of its cash flow, the business could be at risk of missing the warning signs of any problems until it is too late.
Management accounts can ensure that businesses are always armed with the right information to help them react in the right way at the right time.
At first glance, many businesses that are unaware of the importance of management accounts will dismiss them as non-essential. But in reality, being confident in your decision-making capability at all times is the key to running a successful, flexible business – which is why management accounts should never be overlooked.
Management accounts are like a monthly or quarterly “health check-up” for businesses, showing where profits are fluctuating or for forecasting potential cash flow problems later down the line. The information they provide is crucial for keeping on top of cash flow – and a strong set of management accounts should include all kinds of information, such as:

• Profit and loss variances.
• Balance sheets.
• Sales reports.
• Stock and inventory data.
• Cash flow statements.
• Defined key performance indicators.

Management accounts can also be a huge benefit to businesses that are interested in disposals, or mergers and acquisitions (M&A).
Businesses looking at expanding, selling or acquiring another company can compare monthly management accounts in order to assess the viability of such actions.
At Grunberg & Co, we teach our clients a key mnemonic “SMART” – Succinct Management Accounts Reduce Threats.
If you would like to know more about management accounts, please contact us.