STANDOUT agencies use management accounts

STANDSTILL agencies produce accounts.

STANDOUT agencies use accounts.

Compiling and filing a set of year-end accounts is a legal requirement for UK limited companies. All agency owners know this and, if they’re wise, fulfil their obligations each year in order to comply with HMRC and support their Corporation Tax return.

For some STANDSTILL agency owners accounts are seen as an annual chore that, once complete, can be forgotten about for another 11 months. This is a huge mistake.

STANDOUT agency owners file year-end accounts but they also create, review and use accounts on a monthly basis.

The end of year financial statements are entirely retrospective. They are financial accounting, primarily designed to provide information to parties outside the agency. They are a rear view mirror of what happened in your business over the last 12 months.

Monthly accounts are management accounting. They are a tool to help you make better decisions. They can help you understand what is happening in your agency right now. They can help you fix issues before they become bigger problems, and take advantage of opportunities you might not have even noticed.

As an ambitious agency owner you should be speaking to your accountant and reviewing your business performance at least once a month.

All agencies must produce statutory financial accounts. STANDOUT agencies use monthly management accounts.

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