Management Account Preparation

Management accounting is the process of preparing and producing the financial reports for managers and business owners.

Most companies produce management accounts because they need to examine the financial health of the organisation. Preparing monthly management accounts is good business practice. They give a snapshot of your business position and can act as a benchmark to compare past and future performance.

Up-to-date, accurate business information is vital to sustainable growth. Leadership teams need to make decisions based on evidence, they can’t simply rely on their intuition. They need facts and figures to determine the reasons behind underlying problems, to assess the different options for taking action and, if necessary, changing course.

That’s why it’s also important that finance teams produce management reports as soon as possible after the end of each month. They’re providing key information that will be discussed in board meetings and used to plan business strategy. Monthly management reports also inform sales targets and budgets and enable managers to re-allocate resources effectively.