Innovative Bradford accountants Watson Buckle, is calling on business owners not to overlook the benefits of management accounts.
The leading firm has warned that businesses that overlook management accounts could miss out on important opportunities for growth or fail to spot the warning signs of financial distress.
Andrew Padgett, Associate Director at Watson Buckle said: “Management accounts are an essential monthly ‘health check’ for businesses, providing information that is crucial for keeping on top of cash flow and getting the most out of a business’s growth”.
“A robust set of management accounts should include information such as profit and loss reporting, balance sheet and cash flow statements”. Andrew emphasised that any business that fails to keep on top of key financial reporting is likely to be unprepared for any unforeseen challenges which might arise”.
“Without a sufficient overview of cash inflow and outflow, the business could be at risk of missing the warning signs of financial distress until it is too late.”
Andrew said “Management accounts could be beneficial in a wide range of circumstances, including where business owners are looking to restructure by selling, merging, acquiring, growing or diversifying. Management accounts provide up-to-date figures to base key decisions on”.
“Up to date management accounts can also be offered to finance providers when applying for business loans or other finance products, often increasing the chance of finance approval”.
“At first glance, many businesses that are unaware of the importance of management accounts will dismiss them a non-essential. But, in reality, being confident in your decision-making capability at all times is the key to running a successful business.”
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