M37ManageFinance· Module 6
Management Accounting
The accounts arrive months late and are built for tax. They don't answer management questions.
- Manage
- Grow
- Finance
- ~5 min · Template
The business problem
Statutory accounts show the business as a whole, once a year, for the tax authority. Management needs different views — by product, branch, customer and month — delivered quickly enough to act on.
Why it matters
Management accounts turn finance from record-keeping into decision support. They show which parts of the business make money and where performance is drifting.
What you will learn
- Design a monthly management accounts pack
- Report by segment: product, branch, customer or channel
- Compare actuals to budget and last year
- Close the month quickly and reliably
Core questions
- Which branch, product or customer group is most profitable?
- How did we perform against budget this month, and why?
- How soon after month-end do we have the numbers?
- Which figures would change our decisions?
Work through the module
CaseWhat is happening?
Restaurant group, 4 outlets · Illustrative teaching case
A restaurant group receives annual accounts only. When monthly accounts by outlet are introduced, one outlet turns out to be loss-making after its share of central costs, while another subsidises it. The group can now decide on the loss-making outlet with evidence.
DecisionWhat does the leader need to decide?
Keep annual accounts, or invest in a monthly close and management reporting?
FrameworkHow should they think about the problem?
The management pack
One page of headlines; profit and loss by segment; cash and working capital; actual versus budget with explanations; key operating measures. Delivered within ten working days of month-end.
ToolWhat can they use?
Management accounts templateTemplate
- Headline summary and actions
- P&L by segment
- Cash, receivables, stock and payables
- Budget variance with explanations
- Operating measures
ApplicationHow does it apply to their business?
Apply it to your own business:
- Decide the segments that matter for your decisions
- Draft the pack using last month's data
- Set a target close date
ImplementationWhat changes?
What should change in the business:
- Agree a month-end close calendar with finance
- Review the pack in a monthly management meeting
- Track decisions taken from it
ReviewDid it work?
How to tell whether the change worked:
- Is the pack delivered within ten working days?
- Are decisions being made from it?
- Have loss-making segments been addressed?
After this module you should be able to decide
Keep annual accounts, or invest in a monthly close and management reporting?
And leave with: A monthly management accounts pack.
Sequence · Finance