Management Accounts can be described as the equivalent to year end
accounts, produced every month. They allow you to check promptly on the
progress and financial health of your company. Profit percentages, often a
key performance indicator, can be reported. Overheads can also be
monitored to allow greater control of costs. Although there is no legal
requirement to produce them, it is difficult to run a business efficiently without
them since they play a key role in record keeping, planning and control, and
decision making.
Usually Balance Sheet and Profit & Loss accounts will be produced and
incorporated into the month end reporting and analysis routine. Management
Accounts on Power-Gx will normally replicate your Chart of Accounts.
Chart of Accounts
A Chart of Accounts is a list of all nominal ledger accounts used by a
business, tracked by a single accounting system. Each account in the chart is
classified into one of the following categories: Assets, Liabilities, Equity,
Income, Cost of Sales and Expenses. Your accountant will be able to advise
you of the layout for your Chart of Accounts. Click here to view an example
Chart of Accounts.
Preparation for Management Accounts
Having decided on the Chart of Accounts layout to be used for your
Management Accounts, you should examine your Trial Balance. It displays
the nominal accounts and figures that will be involved in Management
Accounts and can be used to double check calculations. You should check
the Trial Balance to make sure all the nominal codes you require exist on the
system, and that the figures do in fact balance.