With uncertainty looming over the UK economy, making sound decisions for your business is more crucial than ever. We think using cloud accounting is part of the solution and there are countless reasons why your business needs management information.
Cloud Accounting
If you are using cloud accounting you are on the right path but how good are you at using the software? How effectively do you harness the power of your accounting software reports?
In the fast-paced world of modern business, staying ahead of the competition and ensuring smooth operations requires informed decision-making. This is why your business needs management information. Data you can rely on to make day-to-day decisions.
Many of our clients rely on cloud software to seamlessly meet their compliance needs. By utilising this solution, they can effortlessly manage their bookkeeping, submit VAT returns, and maintain essential data for year-end accounts.
However, your business needs more. Your business needs management information. You can get some basic information at least by using your cloud software.
Does my cloud bookkeeping software have meaningful reports?
All cloud bookkeeping software has built-in reports that are incredibly useful and easy to use.
However, it’s important to remember the saying “garbage in, garbage out.” To rely on these reports, you must ensure that your bookkeeping is done frequently and accurately.
If you are short on time and can’t give bookkeeping the attention it deserves, consider hiring someone to handle it for you. We can take care of your bookkeeping needs.
But if you are excelling at bookkeeping, then it’s time to start utilising some of the reports.
Top Reports to use within the cloud software
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Profit and Loss
Review your detailed profit or loss and investigate any abnormal balances. If a certain cost seems too high, it could be a duplicate in your records.
Use the report to assess profit levels and consider your pricing. Keep in mind that profit doesn’t equal cash!
Consider a cash flow report if you’re making a lot of profit but never seem to have much money in the bank.
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Balance Sheet
Balance Sheet gives you a snapshot of the overall health of your business.
Make sure to review your loan balances and ensure that the interest is being recorded correctly.
Additionally, check for any old balances that aren’t decreasing. Sometimes old balances are left and it can distort your view.
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Aged Debtors –
This report provides an overview (with an option for detail) of all outstanding debts. It will prompt you to have regular follow-ups on overdue payments. Chasing debts in regularly is the key to a healthy cash flow!
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Aged Creditors –
Make sure you know who you owe money to and prioritise keeping your main suppliers happy! This also includes any money owed to HM Revenue & Customs for VAT, PAYE and Corporation Tax.
If you are unsure where to find these reports or how to use them, please reach out to us. If you are working with us, please contact your regular manager, who will be happy to assist you.
This will help you become familiar with accessing the necessary data to make informed decisions.
Cash flow forecast also, a key report remains essential but isn’t easily accessible from your bookkeeping software. You would need to use separate software, spreadsheets (cumbersome and prone to errors), or an accountant.
Top tips to make sure you get the best management information
The cornerstone of effective management reporting is to engage a qualified professional. This is because they are skilled at interpreting the data and raising red flags on key issues.
However, we understand that this may not always be feasible. Therefore, we recommend the following steps to ensure that your business receives the best possible management information.
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Good Record Keeping
The key to good record keeping is consistency. Do it regularly. Cloud software has so much automation to make the task easier if you can’t afford a bookkeeper.
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Use Comparatives –
When we send you the year-end accounts, you might have noticed that it always includes a comparative. There is a reason for this. It helps to focus the mind on identifying any variances and catching any obvious data entry errors. Or in worst case scenario overspending and under selling.
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Use relevant nominal codes
This is where you analyse the expense further or you want to have more detailed information on your revenue. For example, if you have 5 service lines why put everything to sales? Have a nominal code for each line so it gives you useful data.
Next Steps
If you are using QuickBooks or Xero we can help you navigate through your data. You can rely on us to interpret your data and present it to you in a meaningful way. We can present the management information to you in a way that is easier to digest.
Regular management information is a cornerstone of effective business management. There are so many reasons why your business needs management information. In an ever-evolving business landscape, the value of regular and accurate management information cannot be overstated.
Businesses that invest in robust management information systems are better positioned to thrive and achieve sustainable growth.
You’ve got a business that works but the problem is you are too busy working in the business and are swamped. Look at how we can help you achieve your goals and ambitions by providing you with what your business needs.