What to Include in the Preparation of Monthly Management Accounts?

February 15, 2022

Monthly management accounts are the books of record for the business. They are created to demonstrate how money is coming in and out of the company on an ongoing monthly basis. In addition, they are the accounts used for timing purposes when comparing financial results of one month to another. 

In fact, Archimedia Accounts providing management accounts templates for small businesses has made it easy to create their management accounts. However, this post has highlighted what should be included in the preparation of monthly management accounts.

1. Cash Flow Statement

It is a financial report that records all inflows and outflows of cash in a specified period to give an idea of how much cash the business has. To prepare the cash flow statement, you need to know the cost of materials used, wages paid, and other expenses like rent, etc. Then, deduct these costs from the total sales made during that period. The net figure is what should be shown in your cash flow account for that particular month.


2. Balance Sheet

The balance sheet is a financial report that shows the financial position of a company at a particular point in time. In addition, the balance sheet shows the assets, liabilities, and owner’s equity. Assets are things like: cash, inventory, stock, etc. Liability is the money owed by the company to other parties who have contracted with the company to provide the services or products. Finally, owner’s equity is the owner’s investment in the company.

3 Profit and Loss Account

A profit and loss account is a financial report that shows how much money the business has made and how much it has lost. In addition, it shows the income statement and all the expenses incurred during that period. Those expenses can be direct costs like wages paid and material used during production etc., or indirect costs like rent, utility bills for electricity, etc.

4. Key Performance Indicators(KPI) 

KPI is an important report that helps to determine whether the business is doing well or not by comparing the actual results of one period to another. KPI can be found in each department of a business. For instance, the sales department is likely to have KPIs like number of clients, number of orders, and a number of sales.

5. Stockholders Report

This is a report for the business about its stockholders. It is a report that shows the financial position of the company at the start and end of each year. This report helps to know whether there is any stock holding in the business that is in surplus or in deficit. Moreover, this report can be used to assess the tax liability and if there are any dividends left to pay out to stockholders. In addition, this report can also be used if there is any need for raising funds.

6. Bank reconciliation

Bank reconciliation is a statement that compares what is shown in the company’s books with that of its bank statement. This statement helps to know whether there are any discrepancies between them. They can be discrepancies like money owing to the company and money showing in your bank statement or any other discrepancy. Most accounting software programs have a reconciliation report feature that can be used for this purpose.

7. Operational reports

Operational reports consist of all the activities that take place in the business on a day-to-day basis. In other words, it is a report on how the business is being run and what it is doing every minute. These reports keep stakeholders informed about the issues that are currently affecting operations, such as sales trends, production issues, etc. They are created to help the management of the company to make better business strategies and decisions.

8. Budget Reports

Budget reports are essential to have a better forecast of how much income and expenses the business can expect to incur during the next accounting period. It is created by dividing the total amount expected to be generated by the business during that period into different categories of income and expenses like labor, material, etc. This way, it becomes easier for you to know what should be done to increase your income or decrease your expenses if necessary.

The main job of management accounts is to help you make better decisions. Managing your business requires a lot of thinking and strategic planning. Still, management accounts provide you that extra bit of information or data which can help you make better business decisions.


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