Cash Flow & Management Reporting

A key aspect to running any great business is the provision of relevant and accurate information on a timely basis. Information needs to be both forward looking projections as well as historical results. Margins need to be protected and overheads controlled tightly. Budgeting if done properly can be a powerful tool both to monitor and also control a company.

mr1How to double the value of your management accounts

Do your management accounts comply to the norm, showing any or all of these shortcomings:

  • Too late
  • Backward looking only
  • Missing cash flow statement or balance sheet
  • Lacking an insightful commentary

Or even worse, do you not get any at all?

We are passionate in our belief that management accounts can often be greatly improved to add value for clients. This is how it can be done:

Sales analysis Hopefully, ‘Sales’ is the biggest number in the accounts. So why does it invariably appear as just one line? We like to analyse sales over product/service, by fee-earner or sales person. Let’s map the trend in a graph, or perhaps better yet, with a Moving-Annual-Total that removes the vagaries of seasonality
Reflect business drivers Do your accounts reflect the things that actually drive the business? Whether it be your Google page-rank, sales call/enquiry volumes or new sites found for a roll-out business, often non-financial measures will tell you what the accounts will show long before the first invoice is entered. But do they form part of your Business Intelligence? They should
Integrate to forecasts Do you know what the final year out-turn will be, working at the current run rate. An integrated forecasting system can do this.
Cash flow “Sales are vanity, cash flow is sanity” goes the old saying. Some business structures absorb cash as you grow. So the faster you sell, the faster the cash disappears. We model cash flows and report on them so you can see where the money has gone
The commentary How often do we hear “I don’t understand my accounts”? Too often. There is quite an art to writing plain-speaking, well presented commentaries. There is an art in writing an insightful management accounts commentary

The corollary of “what gets measured gets done” is “what is not measured does not get done”. When was the format of your accounts last reviewed in those terms? A good finance director will design, deliver and adapt reports to focus on the key performance indicators of your business.

Call us to find out how we can double the value of your management accounts.

(Based on work by FD Solutions, the flexible Finance Director Service and used with permission)

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