Annual accounts provide an important record of a company's financial performance, but by the time they are completed, the information can relate to a period that ended several months earlier.

Management information serves a different purpose. MBS Accounting Services provides management reporting, financial analysis and commercial support designed to help directors understand what is happening within their business now and make better-informed decisions about what happens next.

Management reporting can include profit and loss accounts, balance sheets, cash-flow information, gross-margin analysis, overhead reviews, debtor and creditor positions and comparisons against budgets, forecasts or previous trading periods. The precise information required will depend upon the business.

For many companies, one of the most important areas is understanding the relationship between profitability and cash flow. A business can report a healthy profit while simultaneously experiencing pressure on its bank balance. Growth, increasing stock levels, slow-paying customers, capital expenditure, tax liabilities and movements in working capital can all consume cash.

Regular management information can help identify these issues much earlier. We can analyse debtor days, creditor positions, stock levels, gross margins, overhead percentages and other key performance indicators relevant to the individual business.

Budgeting and forecasting can then be used to look forward. Cash-flow projections can incorporate expected trading, VAT, Corporation Tax, payroll, capital expenditure, loan repayments and other significant commitments, providing management with a clearer picture of anticipated funding requirements.

For growing businesses, small changes in financial performance can become increasingly significant. A movement of only one or two percentage points in gross margin can have a substantial impact on annual profitability as turnover increases. Regular reporting allows these trends to be identified and investigated.

Our wider business advisory support can also assist directors considering investment, expansion, funding, acquisitions, disposals or other significant commercial decisions.