January 12, 2016

3 ways your creative agency can benefit from management accounts

 3 ways your agency can benefit from management accounts

Management accounts bring all kinds of benefits to all kinds of businesses - and in particular, they bring clarity to the creative chaos that can be agency life! So, in this blog post, were going to focus on three of the most tangible benefits of management accounts for creative agencies.

If youre still not entirely sure what management accounts are, they are monthly or quarterly financial statements that give you a clear overview of your business finances based on real-time data. Youll find out more about management accounts here.

 

Better decision-making

Benefit number one: producing monthly management accounts allows you to make better-informed business decisions. And better business decisions will, ultimately, lead to more success and higher profits for your agency.

Your decision making improves simply because youre armed with accurate, real-time data - as opposed to data from your annual accounts which is often up to 18 months old.

Creative agency management accounts will usually include a profit and loss account (showing you precisely what money has entered or left the business in the last few weeks), so if youre spending beyond your means, youll pick it up and act on it before it spirals out of control.

Similarly, you can identify which of your departments are doing the businessand which arent - which provides great insight for investing in new staff.

 

Better tax planning

If youre only producing your accounts once a year to satisfy HMRC, your end-of-year tax calculation is very much a moment to keep your fingers crossed and hope for the best.

But with regular management accounts, youll know exactly how much money youve made each month, and therefore youll know how much tax you need to put aside.

By the time you owe the taxman his dues, youll have the money neatly saved up in a savings account, ready to hand over. No stress. No nasty surprises.

 

Better borrowing potential

One more perk of management accounts - a better relationship with your bank. And in any kind of business, thats a great thing to have!

Whether youre looking for a bigger overdraft facility, or hoping for a favourable answer to a loan application, its a big help if you can show up-to-date financial data based on recent results.

Of course, this is just the tip of the iceberg. There are many, many more advantages to creative agency management accounts too. If youd like to know more, just get in touch with the Inform team.

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