What are Management Accounts and How Can You Use Them?
Posted by Ben Williams on Thu, Jan 26, 2012 @ 05:14 AM
Management Accounts are completely different to your standard accounting. In our opinion, it’s an essential part of being a proactive accountant, especially if your accountant is capable of strategic management accounting. The reason for this is that your standard accounting; the tax returns, VAT returns, etc. are looking into the past – reporting on something that has already happened.
The difference with Management Accounts is that they are primarily forward-looking, and designed for use by managers and decision makers within the business, with the aim of helping them to make decisions.
The Chartered Institute of Management Accountants have described Management Accounting as “the process of identification, measurement, accumulation, analysis, preparation, interpretation and communication of information used by management to plan, evaluate and control within an entity and to assure appropriate use of and accountability for its resources. Management accounting also comprises the preparation of financial reports for non-management groups such as shareholders, creditors, regulatory agencies and tax authorities"
Management Accounts can be a great tool for your business, as it shows you how your business is currently performing in certain performance metrics, and helps you to make decisions that will benefit your business; whether it is to market a certain product more, or to cut off a product all together.
Management Accounting will help you to identify trends in both your business, and the industry. It will also evaluate the market, and your product/service’s profitability, as well as the financial effects of strategies and plans you have recently undertaken.
For more information on Management Accounts, have a look at this page.
If you would like to speak to us about Management Accounts, you can contact us here.
