There is a huge difference between management accounts and statutory accounts. While statutory accounts are an annual legal obligation and have to be submitted to HMRC and Companies House, management accounting, whilst not being obligatory, is a crucial management tool primarily intended to provide all the critical information that a company requires for internal decision- making. Generally speaking, management accounts are produced on a monthly cycle with the main emphasis of their structure being for planning and control purposes. Management accounts operate as a vital business barometer that provide managers of a company with all the information they require to monitor the situation and make informed, accurate and timely decisions before it may be too late.
In some organisations, the process of compiling these monthly accounts is often left to accountants or bookkeepers who will simply grind out a set of figures. At KOB however, we go much deeper and thanks to our impressive business background, we are able to contribute far more than that.
The reason we can contribute at this highest level is that as well as being Chartered Accountants we are also extremely experienced business consultants and because we understand business just as well as accounts we are able to make a telling contribution to how well a business is run, how successfully it is performing and what decisions may need to be made.
When we are commissioned to produce management accounts we first of all try to become as involved as possible in the business so that we understand exactly what it does, where its markets are, what are its strengths, weaknesses, opportunities and threats, what the future goals are and whether it is performing at a level that will ensure that it meets those targets.
We see that a vital aspect of our contribution to producing timely, accurate and meaningful management accounts is that we also attend the monthly meetings where we can not only gain access to previous figures and past records, but we can also discuss and influence how changing circumstances may have affected these statistics.
In other words we like to become almost ‘a part of the business’ and even though that might not be in an official capacity we know that we will be able to become a valuable and knowledgeable ally who is able to assist managers make the correct decisions, influence change where it is required and to help guide the company on the right path to future success and prosperity.