Plain-English bookkeeping for small UK businesses

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Management accounts for small businesses

Management accounts for small business owners in London: monthly figures that show profit, cash and who owes you while there is still time to act.

Most small businesses only see a full set of figures once a year, months after it has ended. Management accounts give you the same kind of picture every month or every quarter, so you can see how trading is going, spot a cash squeeze before it arrives and make decisions on facts rather than on the bank balance.

Who it's forOwners of growing businesses, limited companies and sole traders who want regular figures they can make decisions with, and anyone who needs up-to-date accounts for a bank, an investor or a partner.

What are management accounts?

Management accounts are reports prepared for the people running the business, not for HMRC or Companies House. The purpose of management accounts is to help you run the business: think of it as a London management accountant on call, without hiring one. There is no set format in law, so they can be shaped around your questions: are we making money, where is the cash going, and are we on track?

What is included in a set of management accounts

There is no fixed management accounts format, but a typical monthly management accounts report includes:

  • Profit and loss for the month and the year so far, compared with last year or with your budget
  • Balance sheet showing what the business owns and owes at the month end
  • Cash position and how it has moved during the month
  • Debtors and creditors: who owes you money, how long it has been outstanding, and who you need to pay
  • Key figures that matter to your business, such as gross margin, average sale or staff costs
  • A short commentary in plain English explaining what has changed and anything that needs your attention

What management accounts look like

Ours are a short pack: a page or two of figures, a chart of sales and cash, and the commentary. The commentary is often the most useful part. A page of figures tells you what happened; a few sentences next to it tell you why, and what to look at next.

Management accounts vs financial accounts

Financial statements vs management accounts: the difference comes down to who they are for.

Financial accounts, also called statutory or year-end accounts, are prepared once a year in a format set by accounting rules. A limited company files them at Companies House, and they are used to work out the tax you owe. Our page on year-end accounts and Corporation Tax covers that work.

Management accounts are prepared during the year for the people running the business. They have no fixed format and no filing deadline, and they focus on the future as much as the past. Both are built from the same books, which means good monthly management accounts also make the year end quicker, because the figures have already been checked twelve times.

Monthly or quarterly management accounts?

Monthly management accounts suit businesses where things move quickly: lots of transactions, stock, staff or tight cash.

Quarterly management accounts can be enough for a steadier business. You can start quarterly and move to monthly later.

Budgets and cash flow forecasts

Management accounts look back at what happened. A budget and a cash flow forecast look forward. Comparing the two each month is where the value is: you can see whether sales are ahead of plan, whether costs are creeping up and whether cash will be tight in three months' time.

We can prepare a simple budget and a rolling cash flow forecast alongside your management accounts, which helps if you plan to hire, borrow or face a large tax bill.

Preparing management accounts: what we need from you

Management accounts are only as good as the books behind them. Every transaction needs to be recorded and every bank account reconciled to the month end before the figures mean anything.

If we already keep your books through our bookkeeping services, the management accounts follow straight on from the monthly reconciliation. If you keep your own books, we check them first and tell you about anything that needs fixing.

Books can be kept in IQ Books or the software you already use, such as Xero, QuickBooks or Sage, with live access for you.

How our management accounts service works

You can outsource management accounts reporting to us completely, from the bookkeeping to the preparation of management accounts each month.

  1. Free 20-minute call

    We talk about what you want to see, how often, and what decisions the figures need to support.

  2. Agree the format

    We agree a fixed monthly fee and a short report built around your business.

  3. Close the month

    Your books are reconciled to the month end and checked.

  4. Report and talk

    You receive the management accounts with a plain-English commentary, and we go through anything that stands out.

The work is done by our AAT-qualified bookkeeper and reviewed by the Chartered Accountant on our team. We are based in Camden, London, and work with small businesses across London and the UK by phone and video.

Questions people ask

What should be included in management accounts?

Usually a profit and loss for the month and the year so far, a balance sheet, the cash position, who owes you and who you owe, a few key figures for your business and a short commentary.

What is the difference between management accounts and financial accounts?

Financial accounts are prepared once a year in a set format for Companies House and HMRC. Management accounts are prepared during the year for you, in whatever format helps you run the business.

Financial accounts vs management accounts: which do I need?

A limited company must file financial accounts each year. Management accounts are optional, but they give you the figures during the year, when you can still act on them.

Is there a set format for management accounts?

No. The format for management accounts is up to you, which is why we build ours around the figures you use. If you want a management accountant in London without a full-time hire, this is how we work.

Do I need management accounts as a small business?

There is no legal requirement. They are worth having if you want to know how the business is doing before the year end, or if a bank or investor asks for up-to-date figures.

How much do management accounts cost?

It depends on how often you want them and how many transactions you have. We agree a fixed monthly fee before we start. Our guide to what an accountant costs in London covers typical market ranges.

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Get figures you can act on

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