Will management accounts work for you?

March 28th, 2019     Improve Your Business

Are you looking to have a profitable business with good cashflow to help you get the business you need to have the life you want? Having detailed management accounts will help, they will help you see what’s happening and what you need to change to keep your business on track. Here are three examples of outcomes our clients experienced by using management accounts.

Management accounts strike gold!

Management accounts highlighted a spike in the use of materials by our manufacturing client that prompted an investigation that found £6,000 of scrap gold that had not been internally recycled. As a result, changes were made to systems that meant this should not happen again.

Sales figures and gross profit dips identified training needs

Looking at monthly figures along with key performance indicator reports identified a salesperson that needed help to improve performance. Not only were conversion rates not what they should be, but also poor job pricing gave lower than required gross profit margin. Additional sales training and better quote production processes improved performance, which showed up in the following set of management accounts.

Profits triple in six months using information from management accounts

For the two years prior to our starting to work for our client, despite a turnover figure in excess of £400,000, the profit each year was around £21,000. Big changes were made after going through the management accounts, profits for the first six months of the current year are already over £63,000, without a significant change in turnover. The management accounts prompted questions that resulted in changes that brought the increased profit.

Management accounts highlight the good as well as the bad, what’s working and what’s not working and can help in many ways other than business performance; like tax planning. They give you essential information, letting you know how you are doing and whether or not you’re on track.

We work with business owners to build the businesses they need to have the life they want, so if you want to talk about how management accounts could help you, get in touch with me on 01803 296678 or email andrew.price@andrewprice.co.uk