Thought about your management accounts lately? No? You’re not alone. We appreciate that management accounts aren’t the top of most business-owners’ To Do lists. But here are a couple of reasons why they should be:
- To gain finance – There probably isn’t a single finance provider or funding body who would take your business seriously without recent management accounts.
- To see where your money is – Relying on your bank balance can give you a distorted picture of the financial well being of your business. Your management accounts provide a much clearer overview of what’s going on.
Beyond management accounts
Up to date management accounts are important. But they only give you a financial perspective on how your business is doing. What about your company’s overall performance? How effectively is it meeting its goals? You can find out with a Balanced Scorecard and Key Performance Indicators (KPIs).
Turning business goals into reality
Essentially, the Balanced Scorecard is a system which takes your goals and aims for your business and turns them into specific, measurable KPIs. These KPIs are not purely financial. KPIs connect all the different activities and levels of your business and cleverly balance financial information with overall performance information. They could be new enquiries, new customer complaints or projects completed, for example. You can then use them to actively drive your business to develop. A Balanced Scorecard can help take your business to the next level, for example, in moving from being a sole trader to running a company.
If you feel like you’re becoming bogged down in everyday detail and losing track of your goals, it may be time to apply a Balanced Scorecard to your business.
Want to know more?
Would you like to discuss taking a more strategic approach to your business development and finances? We’d be happy to talk to you. Please call us on 0115 871 5842 or email us at: email@example.com.