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Management accounts: the monthly pack that actually runs the business

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Statutory accounts tell you how last year went, nine months after it ended. Management accounts tell you how this month went, in time to do something about it. For an SME, a tight monthly pack is the difference between steering the business and reading its obituary. Here is what belongs in it. Page one: profit and loss vs budget Actual versus budget, this month and year to date, with variances flagged and explained in plain language. A variance without a note is just a number; the note is where the management happens. Five lines of commentary beat fifty lines of figures every time. Page two: cash and working capital Profit is opinion, cash is fact. The pack needs the cash position, debtor days, creditor days, and stock days if relevant, each with a trend. A profitable business with stretching debtor days is a business heading for a funding gap, and the pack should say so before the overdraft does. Page three: the KPIs that matter to you Three to five numbers specific to the busi...
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Bookkeeping for new limited companies: the first 90 days

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  Incorporating a limited company takes a few hours. Running its books properly takes a system, and the first 90 days are when the habits get set. Get these foundations right and everything downstream (VAT returns, payroll, year-end accounts, corporation tax) becomes routine. Get them wrong and you spend year one reconstructing. Week 1: separate everything Open a dedicated business bank account before the first transaction. Every pound of company money flows through it; no personal spending, no exceptions. Connect the bank feed to your accounting software (Xero, QuickBooks or Sage) on day one. This single step prevents more bookkeeping pain than any other. Weeks 2-4: build the capture habit Every expense needs a receipt, photographed into the accounting app the day it happens. Set up invoice templates with your company number, registered office and VAT number (once registered). Agree payment terms with your first customers and put them on the invoice. The habit matters more tha...
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