While your end of year financial statements provide you with in depth, accurate information on the performance of your business they are often prepared well after the year end. This means that any warning signs or potential areas of improvement identified in these accounts are delayed in being brought to your attention.
The cost of preparing regular management accounts can often be outweighed by the benefits including the following:
Helps to control costs-A monthly set of accounts makes it very easy to compare costs month to month, and to identify any areas of overspend
Can send to banks and other financiers-if you are looking to raise finance from a bank or investor, usually a good business plan, backed up by forecasts and accounts, can dramatically improve your chances of success.
Helps with cash planning –Cash is not the same as profit. Cash in the bank can sometimes give a false sense of security, whereas monthly accounts will make it easy to identify problems or gaps in funding quickly, so that you can look for external funding or reduce costs before the problem becomes critical.
Disclaimer: Advice shared in this blog is intended to inform rather than advise. Taxpayer's circumstances do vary and if you feel that the information provided is beneficial it is important that you contact us before implementation. If you take, or do not take action as a result of reading this forum, before receiving our written endorsement, we will accept no responsibility for any financial loss incurred.