Management accounts: These are mainly for internal. A set of financial data from management accounts is used by business management for their decision making. They are usually prepared on a monthly basis.
Cash flow projections: Cash is important for day-to-day running of any businesses such as paying suppliers and staff. Without cash businesses can become insolvent. Managers use cash flow projections to learn when their business is short of cash so that they can borrow (or cut cost) or when it will have cash that is surplus to its requirement so that they can invest this surplus to earn extra income. The goal of management accounting is to make sure that their business has sufficient funds to survive. Cash flow projections can be prepared on a monthly or quarterly basis.
Budgeting: Management accounting team create a budget to help them plan for their spending. The revenue and expenses for a specified period will be estimated for the budget. Actual sales and spending will be compared with the budget to see whether they are over or under the budget. Any over budget spending should be closely scrutinised while under budget sales should also be questioned.
Variance analysis: this is an analysis of the difference between budgeted and actual amounts. Each of actual amount in financial statements will be compared with the budget. All high deviations from budget need attentions from management. Both revenue and expenditures can be analysed. There are 2 types of variances:
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Why choose MW Accounts Services?
We are one of the leading management accounting service providers in London, UK. Whether you need budgeting, cash flow projections or any other management accounting services, you can contact us. Contact us to discuss your requirements.