Be prepared for possible limitations that could affect your customer's expectations
Following Brexit, there has been a considerable boost to the UK Manufacturing industry with a greater demand for products at lower prices due to the falling pound. However, the cost of importing these products has increased and this is proving to be a considerable financial burden for some UK manufacturing businesses.
With all this uncertainty surrounding the current economic climate, it’s essential for all business owners to have a thorough understanding of their financial situation so they can adapt an agile approach to the swift changes in the market, which may affect their overall position.
Being able to interpret the information on your annual financial statement will give you the knowledge to understand the money within your business, which will give you a strategic advantage. However, the statement is historic and only provides you with a summary of what has happened to date. In order for your decision making to be relevant, the information required needs to be as current as possible, and this is one benefit to having management accounts produced.
Management accounts summarise your accounting data, such as your balance sheet, cash flow and income statement
They can be produced monthly or quarterly depending on your requirements and go into considerably more detail than your annual statement. They provide you with an invaluable insight, so when rapid changes occur in the market, you’ll have the necessary agility to make informed financial decisions.
Regardless what type of product you manufacture or how big or small your business is, management accounts are extremely effective for those who wish to develop strategies and progress within a specific time frame. They will give you far greater control over your business, which will enable you to recognise and address problems and make timely effective decisions.