• Aleksander Sadiku

Management Accounts - The Lowdown

Updated: Aug 19, 2018

What are Management Accounts?

Management Accounts are periodic financial reports designed to show an organisation’s financial position to help users make strategic decisions in the short and long-term. These come in whichever format is most suitable for the reader, based on the information they need to help them make strategic decisions.

What are the Benefits?

Reducing costs
Management Accounts provide great analysis into the various costs of a charity in addition to other resources spent. This information can be shown in a way that helps management understand where their largest costs lie or which suppliers provide the most services and this information can be used to reduce costs or find other potential costs savings (e.g. outsourcing vs bringing in-house).
Budgeting Process
No charity can survive nowadays without a sound strategy and budget. Management accounts allow users to constantly check if the budget is in-line with actual performance and if not, what changes need to be made in that regard. This is important because comparisons with previous years’ performances may not be relevant, so the only way to ensure the charity is heading in the intended way is to manage a budget alongside.
With the information gathered from management accounts, users are in a much better position to make decisions for the good of the charity as they will have an up-to-date report showing the current financial position with current data to act upon. Too often charities discover they have been making losses, months after they can do anything about it, but management accounting aims to give that power back to decision makers.

What we provide
Income & expenditure analysis

We can manipulate this data to highlight your cost distribution, see which income streams you are dependent on, separate your fixed and variable costs to provide you advice on cost savings or any other information you may require.

If you have prepared a budget (which we can also help with) for the year, we can provide various analyses including comparing your budget to actual performance,  variance analysis with reasoning of larger variances, providing advice about adjusting budgets if deemed necessary.

We can also manipulate the data to be split into different departments if your charity runs various projects so you can see the relevant incomings and outgoings of each specific project.

Balance sheet analysis

We can provide you on the health of your balance sheet, offering advice on improving it depending on the ratio of assets to liabilities, provide timely alerts if you have a weak cashflow, develop plans to reduce liabilities and therefore security of the organisation. 

Wages analysis

We can prepare reports showing your employee costs either based on your hierarchy or based on different projects and provide insight into your salaries as a percentage of total income or expenditure so you can make better HR judgements.

KPI analysis

We can manipulate any data provided to report on an organisation’s KPIs, whether that is measuring fundraising/voluntary income efforts, for example, month on month growth in fundraised income or voluntary income as a % of fundraising costs, or it can be in relationship to measuring costs against the funders’ requirements. These don’t necessarily have to be financial KPIs as, if provided with the data, we can provide KPIs on service provision.

Anything else...

We want to tailor our reports to your needs as much as possible so please ask if there are any bespoke reports we can create for you.

What we need
Understand the User’s Needs

We have to discuss with you the format in which you want to see the reports, the information you will require, what data will be beneficial to your organisation and help in decision-making.

Reconciled Records for the Period

In order to provide you with accurate information, we need to be provided with records for which the bank is fully reconciled for the period. In addition, all invoices, whether paid or not should be recorded to accurately see how much you owe/are owed. Just to check all the information is right, we’ll need to be provided with any bank statements, credit card statements and loan statements (if applicable).

Payroll Records for the Period

As we can provide further insight into your staff costs, we’ll need the payroll records to be able to produce information relevant to you, whether it’s for analysing them between departments or hierarchy or assisting in the budgeting process.

Non-Financial Data

Management accounts don’t need to only show financial information, if you have other information you would like us to include them in a presentable manner, just let us know!

How Can We Help?

Alest can provide a cost–effective service with our expertise and experience across various industries.

We understand your needs and we will work with you to understand the information you need to know about your organisation to help it grow and thrive.

If you need help with preparation of records, we would be more than happy to help as we offer further services including bookkeeping, payroll, training and more!

Please contact us for a free consultation on how we can help you on

Need more details? Contact us

We are here to assist. Contact us by email or via our Social Media channels.

© 2018 by Alest Limited 

Company No. 11227424

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