Management accounts

As part of our comprehensive accounting services, we prepare detailed management accounts on a monthly or quarterly basis for our clients. These reports analyse key financial information from your day-to-day trading activities to give you greater visibility and control over the financial performance of your business.

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Regular management accounts enable you to spot trends, issues and opportunities as they emerge rather than having to wait until year end to see the full picture. We present the information in an easy to digest format with accompanying notes and commentary to highlight key points for you to consider. This helps you make more informed business decisions through greater financial intelligence.

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Crafting management accounts is a bespoke service where we work closely with you to understand what KPIs and level of detail would be most useful to manage your business. Typical contents include a profit and loss account showing performance for the period and year to date, balance sheet, cash flow forecast and key ratios. We can also include more detailed analysis of sales, costs and margins by product line, business unit or territory.

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The end result is a set of accounts tailored to your needs that give you increased oversight and understanding of what is driving performance within your organisation. This supports better planning and more agile responses to arising challenges and openings.

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Variance Analysis

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Within your management accounts we would perform thorough variance analysis, comparing actual financial results to budgets and prior periods. This crucial process reveals when and where your business performance is varying from expectations.

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Understanding variances is vital for identifying issues at an early stage so you can take timely corrective action. It also highlights areas where performance is strong so you can capitalise on opportunities.

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We clearly show total variances for key line items like revenue and cost categories alongside a breakdown of component variances. This provides insight into the underlying drivers of divergence from plan or past trend.

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For example, we would calculate separate sales price and volume variances to pinpoint if a revenue change is due to pricing adjustments or the number of units sold. Similarly, material variances can be divided into usage and price elements. This more granular level of variance investigation aids decision making on appropriate actions to get performance back on track or sustain outperformance.

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Keeping on top of variances through monthly reporting and analysis keeps your finger on the pulse of business performance and supports agility to changing conditions.

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Ratios and Performance Metrics

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An important element of the management accounts service is calculating and tracking key financial ratios and metrics. These help assess the health and efficiency of your business operations from different perspectives.

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We would incorporate a range of common profitability, liquidity and efficiency ratios suited to your business such as gross profit percentage, net profit margin, current ratio, days sales outstanding and inventory turnover. Examining metric trends over time and in relation to industry benchmarks enables us to highlight areas of strong performance to maintain and any emerging risk factors that may require intervention.

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Beyond standard ratios, we can also develop and report on more tailored performance indicators that align with your specific goals and strategy. For example, customer acquisition cost, repeat purchase rate and customer lifetime value metrics for businesses focused on subscription models or recurring revenues.

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Setting relevant financial targets and monitoring related metrics through management reporting keeps people focused on meeting business objectives. This fosters a culture of accountability. Also, relating employee incentive schemes to particular KPIs further aligns behaviours with priority outcomes.

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Budgeting and Forecasting

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We provide support with developing budgets and financial forecasts as a further pillar of sound financial management and planning. This process creates a quantified roadmap for where you want the business to get to in the future.

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Our specialists would work closely with you to understand your strategic objectives then translate these into a detailed, bottom-up budget model with realistic growth, cost and investment assumptions that align with your ambitions. We utilise our financial modelling expertise to stress test the projections and ensure they are suitably prudent yet stretching.

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As well as an annual budget, we can help craft shorter-term rolling forecasts on a quarterly or monthly basis. These help track performance trajectory towards budget aims and prompt timely course adjustments if required. Updating the projections with latest assumptions and results also improves accuracy as you move through the trading period.

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Effective budgeting and forecasting enables you to set performance expectations, allocate resources accordingly, measure and incentivise people towards an aligned vision of future success. It is the financial expression of your strategy. Our expertise and external perspective helps build rigour, realism and buy-in around the numbers so they act as a reliable compass for decision making.

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Measurement and Control

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A core part of our remit around management accounting is helping clients establish strong financial oversight and control mechanisms within their organisation. This is about embedding consistent processes, procedures and reporting that provide visibility over business performance and help adhere to a prudent plan.

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We assist with designing fit-for-purpose financial policies, procedures and approval hierarchies that allow business units the appropriate degree of autonomy while preserving central visibility and control where needed. Setting spending authorisation limits and establishing reporting rhythms ensures financial decisions get the right level of oversight without introducing unnecessary bottlenecks.

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Management control is also served through the monthly reporting and variance analysis covered previously. We help managers build capability in investigating deviations to understand root causes and take action where performance is falling short of expectations. Embedding a culture focused on accountability and continuous improvement is key.

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Finally, we advise on protective financial controls utilising systems and technologies to mitigate key risk factors your business may face. For example, segregation of duties, access restrictions and change control protocols on key IT systems. Or volume/spend limits on company credit cards. Such measured help safeguard against potential fraud or human error.

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Combined, this matrix of prudent financial processes, analysis techniques and control mechanisms engenders stability, security and better decision making. Enabling you to feel fully in control of operating and financial performance.

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Why chose Mitchell Associates for your Management Accounts

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When it comes to managing your main business accounts, you need a firm you can truly rely on. At Mitchell Associates our dedicated experts provide a hands-on, partner-led approach that gives you the highest level of strategic financial advice and proactive support. We have built a reputation for helping businesses gain better financial control, visibility and insight to aid growth and resilience through turbulence. Choose us for main accounts that go beyond compliance to deliver commercial advantage from enhanced financial intelligence and planning. Our ambition is not billable hours but your enduring success.