Why choose Freedom in Numbers to help you with management accounts?
Management accounts are business reports that help you understand how your business has performed (essentially looking over what has already happened).
They are important to help you adapt and make necessary changes to your business, and will help it work more effectively moving forward.
But without the right information, how can you be sure that the decisions you are making are right for your business, and are you spotting trends in your sales that you can capitalise on to make more?
Fast growth or sharp decline can be difficult to see just from a set of annual accounts. This is where management accounts come in for you as the owner of your business.
They help drive your strategy ideas and help you identify when you’ll need additional funding.
We have extensive experience with creating custom management accounts packs for business owners. If you’re struggling to get to the information you need, or understand what is best – get in touch and we’ll help!
Management accounts, also referred to as managerial accounting, is used by managers and directors to make decisions regarding the daily operations of a company.
Whether you are simply a single sole trader, or a small business with a team, it is important to keep track of your business funds and performance.
Keeping track of the business’s performance in turn ensures you are keeping track of spending as well as the tax liabilities that you may want to save ahead for.
Poor visibility of your businesses finances can lead to business problems, failure and a great deal of stress for everyone involved.
Don’t panic, we’re here to help!
What are management accounts?
Management accounts are financial reports produced for the business owners and managers, generally monthly or quarterly that report on the performance of the business.
They normally contain a profit & loss report and a balance sheet, but they can also contain other details such as key performance indicators, and aged receivable balances (who owes you money).
In principle they are similar to year end accounts but are less formal and are personalised to what management want information about.
Why does my business need management accounts?
Management accounts aren’t required by law, and they don’t have to be filed with HMRC – but they’ll put you more in control of your finances, supporting the growth of your business and helping you make key business decisions.
You may also need management accounts if you need to apply for a business loan or other finance product, as the lender may wish to see a monthly breakdown of business activity to judge creditworthiness.
To successfully grow your business, you need to be measuring its performance throughout the year, including monitoring cash flow. That means more than just the occasional glimpse at your bank balance.
Your cash balance is simply the balance at any given date, and fails to consider impending outgoings, the sales in your pipeline or the current trading conditions.
Management accounts help you to identify trends in sales quickly and you will also have better information for planning growth, diversification or expansion.
What are key performance indicators (KPIs)?
Key performance indicators are measures of activity that demonstrates how effectively a company is achieving key business objectives.
Businesses use KPIs at lots of different levels to evaluate their success at reaching targets.
High-level KPIs may focus on the overall performance of the business such as gross profit, net profit, and increase in sales, while low-level KPIs may focus on processes in departments such as sales and marketing, including the number of prospects in your sales pipeline, or the number of enquiries via your website for instance.
Why choose us for management accounts support?
As a business owner, you should know what is happening in your business on a regular basis. Not only to look at the bottom line and what sales are looking like, but also key trends and who owes the business money.
You’ll also want a rough idea of tax bills ahead of the year end accounts and what cash looks like after you’ve paid your bills.
At Freedom in Numbers, we’re here to support your business, and take away the stress of the administrative side of business, giving you your freedom back.
We offer a monthly fixed fee service that it tailored to your business and will include all the services you’ll need to get started, including dealing with the HMRC on your behalf!
We will save you time and money.
We’re confident that you’ll love our brilliant customer service and have an excellent experience working with us.
Still unsure what everything means?
No problem, we’ve got some FAQ’s that will help answer your questions.
What is included in management accounts?
This depends on where your business is at in it’s lifecycle, what sector it’s in, and the goals that you want to set for the business.
Typically management accounts will include:
- Key performance indicators (KPIs)
- Profit & loss report
- Balance Sheet
- Cash flow
Whilst these are the usual things to include in a management report, it can be customised to what you want to see and how you want to see it.
We build custom reports in Xero for some of our clients, that reflects the information they want and need to see.
How do I create management accounts in Xero?
Xero has a whole catalogue of reports available to business owners, with management accounts being one of them.
To get to them, simply click ‘Accounting’, and then ‘Reports‘.
We prefer a more custom approach for our clients that makes it easier to understand the figures. This includes key metrics, like gross profit percentage, tracking categories, and custom groupings.
How do I read and understand management accounts?
Reading management accounts can be complicated, and without proper guidance, they simply join the pile of paperwork on your desk.
One tip we often say is to think beyond the accounting details.
Ask yourself – where does my business make its money? Is it a particular service or good sold? If so, are you splitting this out so you can track its activity each month?
How are you monitoring the performance of your team? Some measure activity levels, whilst others may monitor output.
Aim to identify no more than 5 key performance indicators (KPIs) that you would like to monitor. They don’t need to be all financial. Think about other parts of the business too, such as the time taken to pick an item of stock, or how quickly a service can be turned around from the job coming in, to being finished for your customers.
Freedom in Numbers - Accounting and Business Support
We know running a business can be stressful, and sometimes it’s hard to know where to start.
We’d love to hear from you, and help you revolutionise your finance function.
Let us take the stress away, and help you get back to doing what you love.
I asked Hannah to complete my first self-assessment as I wanted to make sure that I included everything that I needed to and make sure that it was correct! Hannah was a great support, patiently answering lots of questions and helped me identify a couple of things which I had missed too. I would definitely recommend Freedom in Numbers, thank you! Joanne R
Hannah and the team have exceeded all and any my expectations. Always friendly and always willing to speak to you on the phone if you raise and issue. Superb accountants Jonathan Y
A very friendly, easy to talk to, accountants that understand how to use technology to make accounts easy. Tim R
From the outset Hannah has provided up to date information, sound advice and a comprehensive schedule for us to work to. Always quick to respond to questions and answers honestly. It’s very refreshing to meet an accountant who genuinely wants to help small businesses grow and to understand the individual.
An amazing accountant, quick, efficient, helpful, responsible and reliable. A pleasure to work with offering a personalised friendly service and a professional approach. My business is in safe hands. Extremely happy with how quickly emails and various questions are answered. Catherine M
Freedom in Numbers has been great for setting up my start-up. They onboarded my business onto a modern accounting software system, like Xero which I can also login to, and then provide ongoing guidance on complicated issues. I now have a solution that gives me control, cost effectiveness and expertise I can rely on when I need it. Tom G
Freedom in Numbers have been an extremely valuable partner in supporting the growth of our business. As well as being diligent and dedicated accountants and financial managers they add tremendous value in terms of helping us improve processes with smart technology and systems. They’re extremely flexible and have helped us manage rapid growth and our changing business needs and have fast become an indispensable part of the team shaping and growing our business. Paul S
Hannah is my 3rd accountant in 3 years of running my business. I struggled to find an accountant who was dedicated to helping new start up / small businesses get set up properly and feel fully supported. I needed an accountant who would be patient, explain things, support me and work as an extension of my team. I won’t be changing accountants again. Hannah is wonderful. I finally feel I have someone I can trust to make sure the finance side of my business is being taken care of leaving me free to do what I enjoy most and what I’m good at in my business. I very highly recommend Hannah. Emma E