The Role of Experienced Management Accountants: Periodic Performance Analysis and Productivity Assessments

Management accounting is a valuable and professional service – but one that many businesses overlook, even if they are already working with an experienced accountancy provider to handle annual statutory reporting and audit processes.

The key added benefit of managing accounting is unrelated to mandatory financial statements. It is focused on extracting and communicating relevant, actionable insights about how a business is performing and how well that performance conforms to business targets and budgets.

Our management accountants might, for example, be tasked with analysing trends or patterns within business finances, projecting income, tax liabilities, and expenses, providing guidance or clarity on financial decision-making, or helping a company develop internal controls and systems to keep its bookkeeping on track.

Let’s examine the role of an experienced certified management accountant, how this fits into the broader picture, and why the knowledge provided through regular reporting may be pivotal to success.

What Do Professional Management Accounting Services Involve?

For many of the businesses we work with, financial reporting is initially seen as a mandatory compliance exercise that must be completed at year-end to produce statutory reports, corporation tax calculations, and reporting for stakeholders and shareholders.

The challenge is commonly that, without regular and accurate insights, businesses may have no reliable way to track performance and trends, whether they are trying to:

• Increase sales, revenues and profitability
• Reduce costs and overheads
• Boost market share and visitor numbers

Management accountants collate all the data and records kept by the company and analyse and present that data clearly and informatively. These reports are generated solely for business management and senior leadership teams and can be structured in any way that proves useful to your business.

This level of continual assessment and review provides you with real-time, accurate information that can be used to improve performance, evaluate the success of business plans and strategies, and see where the business is meeting its objectives—and where it isn’t.

What Are the Benefits of Outsourcing Management Accounting?

Another challenge we often encounter is that businesses are busy, and managers, owners, and supervisors spend a large proportion of their time concentrating on everyday operations or resolving issues without a bigger-picture overview of the company’s finances.

The problem can be that without detailed cost analyses, business performance reviews, or dependable planning, it can be impossible to spot variations or deviations, understand why profit margins or revenues are not as expected, or see how the business can make tangible improvements to aid in efficiency or productivity.

Below, we’ll discuss a few of the major advantages of periodic management accounting for businesses in every sector and industry.

Informed Decision-Making

It is never advisable to make any judgments about the best way to proceed with a plan, product, service, or department without the most recent information.

Management accounts offer detailed assessments, which might dictate when to proceed with business expansion plans, launch a new product or range, or introduce cost-saving strategies without hampering ongoing business operations.

Accurate Cost Management

Businesses trading in competitive markets must always monitor and manage their costs and overheads.

Consistent management accounts not only report accurate costs and expenditures but often highlight areas where there are opportunities to streamline outgoings without compromising on quality.

Up-to-Date Forecasting

Forward planning is best supported by accurate budgets and forecasts, which are based on the latest data, as well as projected incomes, outgoings, profits, liabilities, and gaps in cash flow long before they arise.

This advanced insight ensures businesses can make informed decisions about how to proceed, and be more proactive in preventing cash flow bottlenecks or falling into arrears.

Reliable Performance Assessments

Strategic business management relies on performance evaluations.

Management accountants can develop and set key indicators and parameters that relate to the success of your business, report on progress or variations between performance and targets, and contribute to goal-setting over the long term to establish the most viable ways to achieve your aspirations.

Efficient Tax Planning

Poor tax management can be highly detrimental. An unanticipated tax obligation or overdue payment can lead to fines, investigations, and rising interest charges.

Management accounts aren’t only used for internal performance appraisals but can also help to calculate forthcoming tax liabilities and ensure your business is taking advantage of all relevant reliefs, allowances, exceptions, and schemes.

Ongoing Risk Management

Mitigating business risk is a core aspect of sustainability and continuity, spotting areas of potential concern, quantifying the impacts they may have, and deciding on the ideal approach to either contain or avoid risks or adapt your trading or functions to reduce the effect.

Sector-specific management accounting is particularly relevant, where skilled professionals can relay updates on trends and external factors that are likely to have an influence on your business performance.

Management Accountancy Services for Varied Sectors and Industries

A great deal of management accounting is about data analytics and reporting. This depth of insight is highly relevant to organisations of all sizes and is an investment in financial controls and monitoring for charitable and non-profit entities as well as commercial, profit-making businesses.

While the performance markers and areas of appraisal will differ, the importance of solid financial management applies across the board.

Our management accounting services and quarterly reviews are wholly adapted to your goals, objectives, and key metrics. This ensures you extract maximum value from the data your organisation produces and can rely on that reporting to steer your decision-making in the right direction – advising if there are particular projects or plans in progress you’d like assistance with.

Contact James Todd & Co for more information about management accounting, the benefits this service will bring to your business, or to discuss how to get started with regular, structured business accounting.