| Many small businesses limit their accounting functions to day-to-day bookkeeping, debtors & creditors, and tax returns. This is obviously imperative, but it is important also to keep an eye on the big-picture. Correctly prepared management accounts should show the business owner things such as: - How did your results compare to the budgets/forecasts?
- What are the sales, expenses, debtors and creditor trends looking like?
- How does your cashlow situation look for the next 2 months?
- What capital expenditure are you likely to incur in the next few months and can you finance it?
Not having this very useful information can be compared to driving in a foreign city without a map. Often internal accounting clerks or bookkeepers are not in a position to supply this information, so it is important to establish that the person you are choosing does.
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