Most businesses, whether they outsource their accounting or maintain this in-house, will have a set of
Management Accounts produced on a regular basis (monthly, quarterly or annually). It is worth noting that the
format and content of these Management Accounts will vary widely depending on the size and needs of the
business but also the service being offered by the accountant when this is outsourced. In fact, many
‘Accountancy Practice’s will adjust their pricing based on both the complexity and regularity of the reports they
produce or even market these Management Accounts as a key part of their offering and an opportunity to
differentiate themselves from their competitors.
‘Ata very basic level – Management Accounts will include a Balance Sheet and Profit and Loss Statement to
provide a snapshot of the company’s results at a high level at a given point in time, These provide the
foundation for building in additional schedules and reconciliations to expand the information included in the
‘accounts, Quite often the schedules included will cover reconciliations or more detailed breakdowns of some
accounts (e.g, Fixed Assets, VAT, Bank, Accruals, Prepayments) or even Cash Flow statements. At this stage, the
Management Accounts are useful from a financial compliance perspective as these will contain all the
information which is traditionally included in Financial Statements and provided to Auditors at the year-end.
some key stakeholders, such as Banks, Lenders or some suppliers will also request to see these Management
Accounts as part of due diligence processes or to assess the financial health of the company. Some Business
owners will also find these useful to make decisions for their business, depending on how timely the production
of these accounts are and how accurate the data is. What various stakeholders need will be dictated by the
industry, size and complexity of the business, so for some company’s there is little need to go beyond this stage
of financial analysis and work with the template reports produced by their accountants using existing basic
financial data is sufficient for their needs.
{tis also important to consider the technology angle in terms of what is produced. In my experience, most
management accounts produced in house or by an accounting practice are produced in excel. The power of excel is that itis extremely flexible, and a skilled user will be able to automate the production of these reports to
