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Management Accounts

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Focus on the Big Picture

Information is the power to know ‘how and when’ to respond to the ever-changing landscape in your business.

Hindsight is 20/20, but foresight can be, too. An accurate and timely representation of your management accounts allows you to be a decisive and effective leader. Management reports encompass all information pertinent to your business’s financial health, which lessens the need for guesswork and provides tools to make better decisions.

Financial Versus Management Reports

Many owners and managers in the wine and beverage industry assume that financial reporting doubles as management account reporting. This couldn’t be further from the truth.

Financial reporting operates under GAAP guidelines and allows your company to remain compliant with policy boards. In contrast, management reporting analyzes department performance as well as its relationship to expenditures and returns on investment (ROI). You can think of the management report as diagnostics on the health of the business.

GAAP Reporting

Generally accepted accounting principles (GAAP) refer to a common set of accepted accounting principles, standards, and procedures that companies and their accountants must follow when they compile their financial statements. GAAP is a combination of authoritative standards (set by policy boards) and the commonly accepted ways of recording and reporting accounting information. GAAP improves the clarity of the communication of financial information. Investopedia

Management account reports include your income statement, cash flow analysis, accounts receivable, accounts payable, overhead costs, sales forecasts, value of inventory on hand and analysis of key indicators and historical and budgeted information. This reporting allows management to make educated decisions based on the needs of the business. Let’s discuss how each of these reports can help you make smarter decisions for your company.

Profit & Loss

For business analysis or tax preparation. Net income minus business expenses.

Profit and loss reports are a key part of your business analysis process. A profit and loss report displays the net income of your company over the previous month or reporting period. This includes all wine and beverage sales, as well as any returns on your investments.

That net income is then contrasted with a summary of your business expenses. This comparison is used by accountants to determine your business’s profit. Doing so results in a clear snapshot of the health of your company, which can be referenced with ease for future financial decisions.

Cash Flow

An analysis of the cash flowing in and out of your business over a period of time..

A cash flow analysis allows you to keep track of the money flowing in and out of your business over a select period of time. An accountant compiles all income and expenditures for the week, month, or quarter. Operating costs, income history, investment history, and financing activities are included.

A cash flow report makes it simple for wineries and beverage companies to determine where their business makes money and how where it is utilizing it. If there are any issues keeping the books balanced, analyzing your cash flow will help identify those issues early.

Accounts Payable

Measurement of the outstanding debt to suppliers or creditors.

An accounts payable report is a measurement of your company’s outstanding operating debt. These are short-term debts that you owe to either suppliers or creditors. This report allows you to keep track of where you need to direct funds first and plan your future payments.

You can also use an accounts payable report to analyze your budget. An accountant can break costs down by department, allowing you to locate your greatest expenditures. You can then reference this information if you seek to lower the cost of doing business.

Accounts Receivable

A statement of all money owed for goods or services.

Wineries and businesses in the beverage industry enjoy working with repeat clients, some of whom hold large accounts. Accounts receivable reports are crucial to keeping track of all money owed by your customers.

Each customer will have an individual accounts receivable report. This displays all unpaid invoice balances. It allows you to keep better track of your projected income for each month. You can also use it to determine how long the balance has been outstanding and whether you need to get in touch with a late-paying client.

Balance Sheet

An end of period report tabulating assets, liabilities and stockholder equity.

Balance sheets are necessary for managing your business accounts. This is an end-of-period report that tabulates your company’s assets, liabilities, and stockholder equity. At its essence, it provides a snapshot of the information collected in all the report types discussed above.

A balance sheet is your best tool to understand the financial health of your business. You can easily compare what you owe and what you own. From there, you’ll be able to make financially savvy decisions to guide the company toward future success.

Why to Consider Outsourcing Management Reports

As you can see, there are many types of reports and analyses you need to conduct in order to grasp the financial standing of your business. Ideally, you’ll review these reports monthly or – at the very least – quarterly. However, compiling these reports, checking them for errors, and reviewing the information can cause quite a strain on your company’s resources.

Managers and owners may struggle to find the time needed to develop these management reports. In addition, footing the payroll bill can become quite expensive. You may be forced to redirect staff temporarily to compile management reports, which can impact other departments of your business.

Our Team is Here to Help

Instead of struggling, you can choose to hire our expert accountants. Our team at Protea Financial is well-versed in the collecting data and compiling various types of management reports. Though we are capable of helping any business succeed, we specialize in the wine and beverage industry.

We have the knowledge, time, and resources to work efficiently. You can trust us to develop a reporting system that works for your company and provide you with accurate, informative reports. You can focus your attention on maintaining the financial health of your business, and we’ll take care of the rest.

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If you are ready for real change in how you use your most valuable assets - time & money, fill out the form and an account manager will reach out to you right away.

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Why Protea:

Protea’s goal is to provide, at costs below the market average, timely, accurate, and high-quality financial information on which a business can act.

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