What is a standard set of management accounts?

Monsoon

Those who know me know that management accounts aren't 'my bag.'

I'm never sure what a standard set of management accounts involves. Maybe there isn't such a thing, but you hear "can we see the latest management accounts?"

Obviously P&L and BS, but anything else that has to be in there?

Dean

Monsoon wrote: »

Those who know me know that management accounts aren't 'my bag.'

I'm never sure what a standard set of management accounts involves. Maybe there isn't such a thing, but you hear "can we see the latest management accounts?"

Obviously P&L and BS, but anything else that has to be in there?

Management accounts are for the purposes of the management. So whatever the management require - give them!

Regards

Dean

PAMDILL

Some of them don't even want a Balance Sheet, they just want a P&L and a cashflow.

Monsoon

Thanks both

Dean wrote: »

Management accounts are for the purposes of the management. So whatever the management require - give them!

Regards

Dean

Ta! That's usually the theory I go by. I just wondered if there's a standard few things that are nearly always included. I've never been asked for a cashflow. Ever.

PAMDILL

I used to be asked for it every month with my monthly P&L in my previous company, however that could be because they were always skirting the boundaries of the bank overdraft.

Dean

Monsoon wrote: »

Thanks both


Ta! That's usually the theory I go by. I just wondered if there's a standard few things that are nearly always included. I've never been asked for a cashflow. Ever.

I generally get asked for a "review". Client will say "I've had a good/bad 6 months can you have a look for me?" I'll then provide a basic (excel) P&L. If the client is going for lending the bank might want the same P&L together with the BS - so I'll provide.

I've even just provided the "Trading account" as the client wants to know where is GP% is.

I've never been asked for cashflow as part of "management accounts" (not to say you can't be asked!), I've only ever needed this as part of a business plan.

Management accounts = anything you want them to be.

Regards

Dean

KaySarah

Dean wrote: »

Management accounts = anything you want them to be.

Regards

Dean

I have to produce (simple) Income Statement (PnL), SFP (BS) as well as the Monthly WIP by job as a Cashflow spreadsheet (not for Bank o/d reasons, just purely because that's the way they like it), Oh & Weekly Labour Costs. These are "standard" monthly reports for our Company Jen.

But as Dean said - every company is different, there is no set hard & fast ruling. It's whatever they ask for. They pay the bills, so it's their call :001_smile:

PGM

Monsoon wrote: »

Those who know me know that management accounts aren't 'my bag.'

I'm never sure what a standard set of management accounts involves. Maybe there isn't such a thing, but you hear "can we see the latest management accounts?"

Obviously P&L and BS, but anything else that has to be in there?

Hi Monsoon, this is what I do mainly;

It does revolve around the P&L, but laid out in the way the business operates, so along with the main P&L, you go into more detail and have individual P&L's for each division / department / function / product. Whatever is most useful to base business decisons on.

In the P&L's can be comparisons to budgets, and as the year goes on you may have the original budget and a revised budget (also useful are previous years actual and previous year 12 months ago). Along with a variance analysis of where you'd expect to be at say 5/12's the way through the year.

A commentary is also important, and it can be more "honest" as the management accounts are internal documents. Wordy sections are often overlooked in the accounts, but they do help to put meat on the bones...

You may or may not want balance sheets and cash flows. Again it depends on the type of business, ie is cash an issue, will there be an impact of large investments or slow customer payments. Whether or not you show the balance sheet you may use it to calculate some ratio's. Senior management may want to see a set of KPI's (key performance indicators). This is where the accountant needs to use some skills in giving people what they ask for and deciding yourself on other things you think will be of use to them, and of course this changes over time as the business changes and market conditions change.

groundy

Management accounts we prepare which aren't often as clients don't want to pay for them are usual just the same as a full set of accounts but for a shorter period.

Monsoon

Thanks all

Just wanted to check I wasn't missing something - and apparently I'm not . Super