From numbers to decisions: How to use management accounts to drive business growth.
Imagine guiding a ship in the dead of night with no compass, no stars, and no idea of your destination. Sounds impossible, doesn’t it? That's exactly what running a business without management accounts and reporting is like. These essential tools illuminate your financial path, ensuring you're not sailing blind into the unknown.
So, what are management accounts, and how can you use them to drive business growth?
Bespoke insights that drive data-led decision making.
Unlike annual accounts, which only reflect the past, management accounts are forward looking, helping you get a clear picture about the future of your business. They're produced regularly (monthly or quarterly) and provide up-to-the-minute insights into your business's financial position.
Management reporting allows you to connect the dots between strategy, data points and reporting, helping you take your business’s data, make sense of it all, and use it to drive better decisions.
The real beauty of management accounts lies in their flexibility. There's no one-size-fits-all approach here. Each business can tailor its management accounts to gain insights into its own specific needs and interests. It's like having a custom-made compass that not only points north but also indicates the best route for your particular journey. Armed with this knowledge, you’re able to make better, more informed decisions on the things that matter for your business.
Budgeting & forecasting for the future.
Think of management accounts as your business's financial GPS, allowing you to compare your current course against your budgeted destination, and forecast the journey ahead.
A key advantage of management accounts is their ability to compare against budget and forecast forward, allowing you to see how your business is performing month by month and quarter by quarter. This comparison offers a clear picture of your business's financial health and allows for course correction if you've strayed from your financial plan.
For example, suppose you've underspent on a particular budget item. In that case, management accounts can help you understand the potential impact of this underspending on your profits. It's like having a financial crystal ball that allows you to glimpse into the future and take corrective action if needed.
Going beyond the numbers with non-financial reporting.
Management accounts go far beyond just the numbers. They also incorporate non-financial data like geography, demographics, and product costing to provide insights you wouldn't otherwise have. At Ashton McGill, we’re driving these conversations, helping our clients harness untapped non-financial insights to understand their business better.
Let’s say a retail business has multiple stores across various locations. Non-financial data such as customer footfall, average spending per customer, or sales per square foot could provide vital insights. By integrating this data into their management accounts, the business can identify which locations are performing well and which ones are underperforming. This can inform strategic decisions, such as investing more in high-performing locations, reconsidering the product mix in underperforming stores, or even closing stores that consistently underperform.
However, to leverage the full potential of non-financial data, you need a robust strategy in place. This strategy should guide what data you need to collect to get amazing reports and how you will use it to make informed decisions. After all, shooting in the dark can only get you so far.
Transforming your business with insightful management accounts & reporting.
At Ashton McGill, we believe in the power of management accounts and reporting. We have regular review meetings where we delve deep into your business, providing an outside perspective and challenging your current approach. We also record a Loom video to discuss your management accounts, ensuring you understand exactly what you're looking at.
And the best part? Your management accounts can evolve to suit your needs. Whether you want to look deep into the detail and gain insights into a specific area, or change the reports to increase your understanding of the information as the business evolves, we're here to make it happen.
Grow your business •
Grow your business •
Ready to forecast the future and make informed decisions that drive your business forward? Book a discovery call to find out how we can help grow your business.