Every business owner knows it is critically important for money to be spent wisely. Wise spending can obviously be defined in lots of ways, such as spend that helps fuel sustainable growth, attracts investors, enables testing and validation of products, or builds financial resilience.

If you’re reading this blog, you’re interested in Management Accounts, what they cost, and whether they are worth it.

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So, let’s break this down.

Reminder: What are Management Accounts?

Management Accounts are internal financial reports prepared regularly (monthly, quarterly) to help business owners really understand performance, so they can make great decisions and plan effectively. They usually include:

• Profit and loss statements
• Balance sheets
• Cash flow reports
• Key performance indicators (KPIs)
• Budget vs. actual comparisons

Crucially, rather than using a one-size-fits-all format, Management Accounts are tailored to your business model and its goals, which turns them from passive reports into powerful strategic tools.

So how much do Management Accounts cost?

Management Accounts, like most bespoke accounting advisory services, vary in price depending upon the company’s characteristics.  

At Gravitate, monthly Management Accounts are priced based on the company’s annual revenue range.

Our Management Accounts start at £260+VAT per month for companies with revenue ranging from nil to £30k, and this increases gradually up to revenues between £4m-£6.5m, which are billed at £780+VAT per month. Higher revenues than this are billed on a bespoke basis.

Why are Management Accounts so important?

Management Accounts are not a standard, one size-fits all accounting service, like year-end accounts. Their value comes from their customisable and tailored nature, and the enormous impact they can make to your bottom line.

• They are tailored to specific business goals and priorities

• They can include custom KPIs, split by region, product line, branch or other segment, so you can really drill down into your financial data.

• They can be presented flexibly, including interactive dashboards, charts, commentary and variance analysis

• They can evolve with your business, from light-tough monthly summaries to deeper reviews.

• They are a strategic tool, not a piece of compliance paperwork.

What they help you achieve

Management Accounts can help a business achieve a wide range of financial, strategic, and operational objectives including, but not limited to, the following:

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Did you know: Management Accounts can also be quarterly

If the cost of monthly Management Accounts is out of your price range, but you are still interested in gaining valuable financial insights on your business, you can also opt for them quarterly. This reduces the overall cost for much of the same information.  

The trade-off is that they are less frequent and therefore not as timely. This means some of the speed at which you can respond to the numbers is sacrificed.

In some cases, Management Accounts can also be done half-yearly.

When might Management Accounts not be suitable?

We believe Management Accounts are an extremely valuable tool for most businesses, but there are situations where this may not be the case. Below are some examples of when they may not be necessary or, at least, may not be a priority.

• Very early-stage microbusinesses or sole traders where the cost and complexity may outweigh the benefits.

• Businesses with no clear use or action from the data. Only invest in Management Accounts when you’re ready to act on the insights.

• If owners or managers don’t understand the data or ignore it, then the value is lost.

• Poor or incomplete data. If bookkeeping is delayed or inaccurate, Management Accounts become misleading. Prioritise clean bookkeeping systems before layering on reports.

• If the business is in survival/crisis mode, you may need basic cashflow tracking and cost-cutting, not full Management Accounts.

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If you are interested in gaining greater financial insights but are not sure if Management Accounts are currently a good fit for your business, we can help you assess this to find out. If not, we can also suggest lighter, more cost-effective alternatives.