Annual accounts tell you what happened last year. Management accounts tell you what is happening now, while you can still do something about it.
This is the part most small practices do not offer, and the part that makes the difference between an accountant who records your history and one who helps you run the business.
What’s included
- Monthly or quarterly management accounts
- Profit and loss with comparatives against last year and against budget
- Balance sheet and cash position
- Key figures tracked over time — margin, overheads, debtor days, cash runway
- Commentary explaining what changed and why
- A review call to talk it through
The commentary is the point
A pack of figures nobody reads is an expense, not an asset. What makes management accounts worth having is the explanation: what moved, why, and what the options are.
A £4,000 variance is data. Knowing it came from a supplier increase that has not been reflected in your pricing is something you can act on. We set out the thinking in do I really need management accounts?
What they let you see
Sales up 15%, profit up 0% is a situation you want to catch in month two, not at the year end. Regular reporting surfaces:
- Whether your gross margin is holding or slipping
- Whether overheads are growing faster than sales
- How close you are to break-even and what a hire would require
- How much cash runway you actually have
- Where results are drifting from budget, and whether that is timing or permanent
Budgeting and forecasting
Alongside the monthly reporting we can build an annual budget to compare against, and a cash flow forecast that shows what is coming rather than only where you are today.
Forecasts are also how you test a decision before committing to it — a hire, a lease, a large contract that pays 60 days after completion.
Who this suits
Businesses that are growing, hiring, borrowing, carrying stock or working to tight margins — and anyone who has found that the annual accounts told them something they wish they had known months earlier.
It suits less well a very small, stable business where nothing much changes. We will say so if that is the case.
How it fits with the rest
Management accounts depend on good bookkeeping, and they make the year end faster and less painful because the work has been done as you go.
Looking backwards tells you what happened. Looking forwards helps you decide what to do next.
Common questions
Monthly or quarterly?
Monthly if the business is changing — growing, hiring, under margin pressure, or watching cash closely. Quarterly can be enough for a stable business, though it does mean a problem can run for three months before you see it.
How soon after month end?
The aim is within two to three weeks, which depends mainly on how quickly the bookkeeping is up to date. Figures produced two months late have lost most of their usefulness.
Do I need a budget first?
No, but the reporting is considerably more useful with one. Without a budget you can see what happened; with one you can see whether it was what you expected, which is a different and better question.
Is this worth it if my accountant already does my year end?
They are different jobs. Year-end accounts are a compliance requirement looking backwards. Management accounts exist to inform decisions while you can still make them. Plenty of businesses need both.
Book a consultation to talk about what monthly reporting would look like for your business.