Services
Management Accounts
Management accounts usually include a profit and loss account, balance sheet and a cash flow statement. All large organisations will create this data monthly or quarterly. The intention of collating this data is to give the management and directors visibility of the status of the accounts on an ongoing basis rather than waiting until year end.
Many smaller organisations don’t compile this data as frequently, however adopting these practices gives even the smallest of traders the information and evidence to understand their financial situation and swiftly structure responses accordingly.
Benefits:
- Required to raise finance from a bank or other investor
- Help to control costs
- Can be used to build trust with suppliers
- Helps with cash planning
Management accounts are more useful when compared to a budget or forecast.
To provide this service the following needs to be available:
- Chart of accounts if available
- Bank statements
- Details of sales and purchases
- Most recent year end accounts
- Other changes to assets and liabilities including drawings, and non cash book items
- Access to the company accounts system if available
Cash Flow Forecasting
Cash flow liquidity forecasting enables management and directors the ability to predict the future cash position of their organisation. These forecasts result mainly from calculations of income due from debtors and payments due to creditors. Not being aware of the subtle changes in these cash flows are often the reason companies can go out of business even though they make a profit.
Knowledge of short term cash requirements enables decision makers to ensure the company can comfortably meet short term cash obligations. This knowledge also enables managers to make investment decisions with confidence that the decision is viable in the long term. This data is essential for companies with limited cash at bank or fine margins.
Benefits:
- Manage payments according to cash position
- Become aware of short term cash fluctuations
- Plan cash usage around opportunities and obligations
To provide this service the following needs to be available:
- Most recent year end accounts
- Regular management accounts
- Future cash obligations including regular drawings, equity changes, finance agreements, etc.
- Historic cash flow analysis as a base point for forecasting
- Data for debtor and creditor payment terms and any deviations
Budgets, Forecasts and Key Performance Indicators
A budget is a prediction of the incomes and expenditures of the business for the year ahead, this is prepared before the start of the year and should reflect the financial aims of the company.
A forecast is a projection based on what has gone before and is prepared more frequently, often quarterly, and reflects the most up to date projection of the performance of the business.
Key performance indicators (KPIs) are the key measures of success of the business. These need to be connected to a key business objective. Reviewing your KPIs on a monthly (or, ideally, weekly) basis will give you a chance to fine tune – or change course entirely.
Benefits:
- A budget or forecast creates a base line; actual results can be compared against this to determine how the results vary from expected performance
- Comparing your monthly figures to a budget or forecast provides an insight into how your business is performing and can also be an early warning system that things may not be on track
- Budgets or forecasts can help with cash planning – for large capital spend projects or debt reduction for example
- Variance analysis – analysing actual results, benchmarking against budget/forecasts and investigating differences
To provide this service the following needs to be available:
A budget is a plan for the year ahead and can only be decided upon by the company directors. The directors need to decide upon the priorities of the company in terms of strategy for growth and development. Once these decisions have been made the budget can be created.
Improving Efficiency Through Streamlining Accounting Workflows
Many companies have legacy systems developed organically over years where inefficiencies are locked in. Often time pressures of day to day work do not allow development of efficient systems for data handling and can result in multiple spreadsheets that do not share data and require multiple inputs. Over time these quick fixes are baked into company processes. The ongoing process of producing management accounts or year end results means that these issues are never tackled. Having an individual step in to understand these systems, without being pressured to take part in the day to day tasks of the accounts department, enables the development of streamlined workflows. This rationalisation of accounts practices negates the need to take staff members away from regular accounting tasks.
Directors’ Reports
Directors’ reports are an extension to management accounts. Individual board members or senior managers will often have specific requirements that are not covered by the default management accounts; for example the Finance Director will need data presented in a different way to the needs of the Sales Director or the Production Manager. Individual data packs can be generated in addition to the management accounts customised to the decision makers within your organisation.
Large Data Projects
There is no generic way to describe this. These projects will often be specific to your organisation and will be something that you are unable to devote one of your core accounting personnel to due to company workloads.
Examples from previous projects:
- Creating Statutory accounts for largest group entity, gathering large amounts of data from multiple sources, reconciling conflicting data, consolidating all parties results, tracking progress.
- Middle East VAT discrepancies – cross checking multiple countries and multiple years’ VAT returns with 50000 lines of general ledger data over different currencies and months.
Bookkeeping
Recording all of your financial transactions.
To provide this service the following needs to be available:
- Sales
- Purchases
- Receipts
- Bank statements
This can be used as the first stage of completing a set of financial statements by your accounts department or external accountancy firm.