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Why should I review my financial figures?
18 April 2024
Accounting & Compliance
A lot of clients will go through the year and the first time they know what their profits are is when they meet with their accountant to sign off the year end accounts.
This can be anywhere from a month to nine months after the year end!
How can you make decisions on your business if you only see the figures 9 months later?
So how can I keep on top of my financial figures?
Monthly, bi-monthly or quarterly management reports allow you to more regularly review the performance of the business and can help to make financial decisions more easily.
You can also dive deeper into the figures by looking forwards and forecasting your next six months, year, five years, whichever you need in order to assess your risks and targets.
This opens up a world where you take the lead, set your goals and targets and proactively work towards achieving them.
This approach ensures there a no surprises when reviewing figures with your accountant after your year end, allowing you to reflect on your progress towards your goals.
How detailed should my managements be?
There is no right or wrong answer to this!
It comes down to what works best for you.
We provide this service to numerous clients and each case varies greatly to the next.
Each business is unique and we tailor our approach accordingly.
Basic Management Information
We have some clients that are happy to receive simple management information in the form of a cash position and profit & loss report.
This enables them to see where their cash is being held at that moment and shows a list of outstanding invoices each month to help with debt collection.
The profit and loss report gives an idea of where money is being spent and an estimated year to date profit.
More in-depth
Other clients prefer to go a bit more in-depth on their KPIs and we have built bespoke reports that enable them to monitor their KPIs on a regular basis.
There are some that prefer us to run the reports for them and we have others where we have integrated the reports with their systems so that it can flow through seamlessly into their monthly meetings.
Full Management Information
The nature of a client’s business may dictate that simplified managements are inappropriate and they require a full set of managements where we dive deeper into work in progress and gross profit margins.
This really enables clients to monitor the performance of their departments, projects or simply the business as a whole.
What are the advantages of managements?
Management accounts are an internal reporting measurement and therefore there are no set standards or requirements that need to be followed.
This really allows for a bespoke package that really suits your needs.
Meeting or no meeting? On site or remote? Frequency?
None of this is dictated by arbitrary compliance, it is all in your hands!
This can then be taken a step further where we are looking forwards and planning rather than reviewing past performance.
Forecasting
Forecasts are another form of reporting, much like managements, that can be built entirely to suit your needs.
From a simple forecast that looks at budgeted figures, a plan that shows us the turnover needed to hit desired profits, to a full P&L, balance sheet and cashflow forecast.
These can all be built to meet your needs, some may want something small for internal purposes whereas others have external lenders requesting forecasts as part of a loan agreement.
How can I start looking at my financials?
Give us a call!
If you are an existing client, please give your client relationship manager a call and they will be able to work on a plan with you that best suits your needs.
If you are new here, welcome!
Please feel free to give us a call on 01634 731 390 and speak to Sherrie Sparks and we can work with you to build a path to reviewing regular financial information and the needs that you have.
Take the first step to take control of your financials and make your business work for you!
Our services
If you would like to find out more about some of our services that might help you please take a look at our related pages:
Blogs related to Tax planning
Take a look at our other blogs on the topic of declarations to HMRC:
Why Managing Cashflow is more Essential than ever
The content in this blog is correct as at 18th April 2024. See terms and conditions.
