Using Statistics in Business – Management Accounts
a) Management Accounts
Working out your monthly internal accounts (known as, management accounts) is a must for ALL businesses large or small.
Management Accounts are created by entering figures that represent your liquid assets, i.e. those that can be easily turned into cash: debtors, stock /materials, actual cash in bank on one hand.
On the other hand: creditors, loans, taxes. These simple figures will give you a more realistic financial position.
Making financial decisions using your balance sheet (fixed assets to long-term loans) can possess a huge danger, as it does not reflect your current liquidity position. In other words, do you have the funds to meet short-term commitments?
Management Accounts are used for planning to help build cash flow forecasts and budgets. All financial figures should be reviewed carefully as they may not be as favourable as they look.
For ex ample, you m ay be owed a huge sum of money by creditors, but what if this is long overdue – is it a good cash flow position to have now ? Is the cash in your bank, yours to spend ? Have you allowed for taxes in your cash flow ? I’m sure you get the picture… you need to know where you st and here and now!
Article Index
- Successful Small Business Statistics: An Introduction
- Using Statistics in Business
- Analyzing Statistics in Company Reports
- Successful Small Business Statistics: An Introduction
- Successful Small Business Statistics: An Introduction
- Successful Small Business Statistics: An Introduction
- Successful Small Business Statistics: An Introduction
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