Cash Flow & Management Reporting
How 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)