Hitchin based Chartered Accountants and SME Advisors HW Associates recognises that the last thing that any business wants is unexpected surprises. The adage that what can be measured can be managed is as relevant today as ever. Whilst it is not entirely true that what can’t be measured can’t be managed it is, in general, far easier and efficient to measure and manage!
Today’s trading conditions are, in the main, difficult because of economic uncertainty. Resources must be managed, especially cash, prices maintained and margins protected.
Nobody knows at this point, for example, what the effect of Brexit or US economic policy will have on business. So what can be done? The answer for most SME’s is to outsource the provision of timely, accurate management accounts information to a reputable provider.
SME’s should consider adopting budgeting, forecasting, rolling cash flow projections and the preparation of regular management accounts. These are key parts of any business financial armoury to help identify in advance unexpected business events. Forewarned is forearmed and what can be anticipated can be managed. Accepting that in most cases very little can be done about the effect of Brexit and other macro events these should be parked and concentration focused on what can be influenced.
The budget should not be over complicated and because it is a working document should be adaptive to allow for fundamental changes in either the business or the environment within which the business operates.
The sales forecasts will cover a given period appropriate to the business, say, three months.
The cash flow forecast will be based on rolling data and will link into the sales forecast, the budget and known unbudgeted items.
The management accounts are likely to be for either a one or three month period but the important point is that they should be available to management quickly after the end of the management accounting period . Equally importantly and remembering the need for no surprises the cumulative management accounts for the year should equate to what is in the statutory accounts for the full year.
Recognising that many SME’s have neither the in-house skill nor the available time HW Associates offers an outsourcing service to provide you not only with this information but also regular meetings to advise upon the implications of the results. Our packages start at £2400 +Vat pa payable by monthly instalments. We would like to help you manage your business. If you would like to discuss how we can be of benefit please call us on 01462 420042 or email: info@hw-associates.co.uk.