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Management Accounting

Management Accounting is the process of preparing reports and accounts that provide accurate and timely financial and statistical information to help you make short-term and long-term decisions that enable your business to pursue its goals. In this video, Mitch Hahn explains exactly what Management Accounting is, and how you can use it to become more successful.

Watch it now to find out how you can focus on maximising revenue.

Hi, I’m Mitch Hahn, Partner at Nordens Chartered Accountants.

Today I am going to explain what Management Accounting is and how you can use it to help you become more successful.

Welcome to Nordens TV!

Management accounting is the process of preparing management reports and accounts that provide accurate and timely financial and statistical information to managers to make short-term and long-term decisions. It identifies, measures, analyses, interprets, and communicates information to enable a business to pursue its goals.

Management accounting differs from financial accounting. While financial accounting provides information to people inside and, more importantly, people outside the business, management accounting is mostly aimed at aiding managers inside the business with decision making.

The Role of Management Accounting in a Business

Helping Forecast the Future:

Forecasting decision-making and answering questions, such as: Should the company invest in more equipment? Should it diversify into different markets? Should it buy another company? Management accounting helps in answering these critical questions and forecasting the future trends in business.

Helping in Make-or-buy Decisions:

Is it cheaper to procure materials or a product from a third party or manufacture them in-house? Cost and production availability are the deciding factors in this choice. Through management accounting, insights will be developed which will enable decision-making at both operational and strategic levels.

Forecasting Cash Flows:

Predicting cash flows and the impact of cash flow on the business is essential. How much cost will the company incur in the future? Where will its revenues come from and will the revenues increase or decrease in the future? Management accounting involves designing of budgets and trend charts, and managers use this information to decide how to allocate money and resources to generate the projected growth.

Helping Understand Performance Variances:

Business performance discrepancies are variances between what was predicted and what is actually achieved. Management accounting uses analytical techniques to help the management build on positive variances and manage the negative ones.

Analysing the Rate of Return:

Before embarking on a project that requires heavy investments, the company would need to analyse the expected rate of return (ROR). If given two or more investment opportunities, how should the company choose the most profitable one? In how many years would the company break even on a project? What are the cash flows likely to be? These are all vital questions that can be answered through management accounting.

Management accounting uses activity-based costing to decide what to produce, how much to spend on a product, how much it will cost to service a customer, and what customers and products are profitable. They find the answers to these integral questions so that business owners can focus on maximising revenue.

This has transformed how companies operate. Companies can no longer take vital decisions without considering the implications and outcomes. They can use intelligent analysis and management accounting to invest smartly, and at the same time prepare quickly for events that might impact them negatively.

For more information, please get in touch or request a call back by going to our website www.nordens.co.uk

Beyond Accountancy

At Nordens we're more than just accountants, we're business experts who can help you achieve the biggest goals.

Our specialist strategic division at Norden’s boasts some of the leading entrepreneurial business minds in the country. They cater towards delivering consistent success stories for businesses looking to achieve all their goals and more.

Through highly tailored guidance, coaching and advice, Norden’s Strategic are able to define exactly how your business can attain new levels of success.

Regardless of how you define ‘success’ for your business, our strategic service is guaranteed to bring about real and lasting change. By partnering with some of the UK’s top business coaches, we steer you along the path to greater future.

Every business, no matter how big or small, needs to make the right decisions. How to best manage your accounts can put huge question marks over your business. Accounting 2 You are here to take that away and provide all the answers you need.

Our bookkeeping branch offers a fully inclusive, comprehensive service that they can trust. Since 2005, our specialist bookkeepers have been successfully managing the accounting of individuals and small businesses.

With experts in payroll analysis, credit control and financial recording, Accounting 2 You will lead your business efficiently and with a real purpose to help you grow and prosper.

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Director - Metro Bank

Nordens are always very easy to deal with and extremely professional and efficient. I would have no hesitation in recommending them to my clients for their accountancy needs, no matter how complex they may be.

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Co-Founder - Chicmi Limited

Very good to work with - the team go above and beyond to make the accounts easy and efficient. They're all super friendly and a joy to work with.

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Director - Rose Opticians

I have been using Norden Chartered Accountants for 5 years and very happy with the service provided. All members of the team are very knowledgeable and have a wealth of experience which has proved very beneficial to my organisation

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Principal - Pauline Quirke Academy

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Founder - Dataphone

Having worked with Nordens over the last 5 years, not only to look after my annual accounts but they have also provided outstanding professional advice. They have guided me through a Company share buyback with clear and objective advice. We have also been using Nordens strategic services for a couple of years, which has helped bring about significant improvements that exceeded my expectations. With experience of working with several local accountants over my 29 years in business, I’m very pleased with the service I have received from Nordens.

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Director - Linekers

Trusted our business with Nordens for over 10 years now and watched the company grow into the successful innovative business it has become today. Deservedly so. Every aspect of financial advice we need is always given promptly and with a smile. We have total confidence in all aspects of advice Nordens give. If you are looking for accountants, its a no brainer!

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Great Service at Nordens from a friendly very approachable team Particularly Kirsty Willis and Joe Sword who have been helping us since we started the business in 2016.

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Nordens Chartered Accountant and Business Advisers | Strategic Business Planning | London | Essex | Award winning accountant
Preparing Management Accounts
Hi, I’m Mitch Hahn, Partner at Nordens Chartered Accountants. Today I am going to explain what Management Accounting is and how you can use it to help you become more successful. Welcome to Nordens TV! Management accounting ...
Nordens Chartered Accountant and Business Advisers | Strategic Business Planning | London | Essex | Award winning accountant
Management Accounting
Management Accounting is the process of preparing reports and accounts that provide accurate and timely financial and statistical information to help you make short-term and long-term decisions that enable your business to purs...
  Why I Founded Nordens

In November 2002, having sold our other business interests off earlier in the year, I decided to set up Nordens Chartered Accountants. The easy part was knowing how to do it, as I had established and built a smaller practice a few years earlier, the difficult part was not following the traditional accountancy path. Having run businesses, both successfully and unsuccessfully, I wanted to help business owners resolve their short term problems and work with them to achieve their longer term goals. Business has always been my interest and I love that I can help business owners achieve what seems like the impossible every single working day.

Mark Norden
Founder

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Our limited company accountants have a range of qualifications from The Institute Of Chartered Accountants (ICAEW) to the Association of Chartered Certified Accountants (ACCA). They follow the bye-laws, regulations and ethical guidelines of the ACCA and we are an ACCA accredited employer. We are also accredited by Professional Passport for our Umbrella and accountancy services.