As a management tool timely production of monthly management accounts helps make informed decisions on both the past performance and helps to anticipate future problems that lie ahead. The poor sales in one month will ultimately have a detrimental effect on cash flow in future months as excessive sales will also have implications.
It is not only important to understand the effects of the financial performance of the business but to measure efficiencies against budgets. It is often said that any budget or forecast is out of date immediately it is agreed. Likewise a constantly moving budget does not give any structure to planning. It is therefore important that when measuring performance against budgets the information is relevant and often refers back to the strategy and planning agreed.
Chapman Phillips offer both preparation and analysis of monthly management information and review these figures with clients on a monthly basics. This identifies areas of concern and highlights future planning and development issues. From these meetings targets are set and monitored for future periods.
The monthly management accounts are also supplied to lenders who request these as part of their security. These reports can be especially useful when produced by someone not directly employed by the business as they are able to offer impartial conformation of the figures. Because every business is different a short explanation as to why something has changed in the figures can provide comfort rather than questions if supplied in isolation.