How can a management accountant help with your business strategy?

A management account is a helpful way to gain deeper insights into the financial performance of your business. This practice combines accounting with business management. The result is that you can receive financial insights that do more to help your business.

One key responsibility of a management accountant is to help formulate business strategy. With the data from the management account, you can get insights that help with decision-making. The account should give you clear visibility on profits, margins and trends.

They will work alongside an internal review board with the aim of helping the business function more cost-effectively. This includes a review of budgets and financial processes, as well as advice on investments.

As a recap, you should receive a full report on information such as:

• Gross margin percentage to show profitability
• Overview of overhead costs
• How you’re performing against your KPIs
• Review of stock levels and trends

From saving costs on overheads to getting advice on investments, the strategy encompasses a wide range of changes that can help your business thrive financially.

What they do?

Management accountants collaborate with managers from various departments. They can review your performance with competitors in the sector to identify areas for improvement. They can also leverage internal insights that might show issues with supply and demand, for instance.

Risk analysis

Advice on spending and investments can prove invaluable in reducing risk without stunting growth potential. A review of the overall growth of a sector alongside the performance of competitors can all provide intel on whether an expansion is likely to prove fruitful.

Gaining expert advice on how to use your profits to your advantage can also make all the difference.

Cost-effectiveness

They can build a plan of action for how your business can review its cost-effectiveness. This can encompass a wide range of factors, including:

Reviewing trends so you know when to buy-in more stock or put more effort into marketing.
Identifying overhead costs that could be cut without compromising on your business efforts.
By reviewing both financial figures and internal processes, a management accountant can determine ways to make these work more efficiently.

We hope this article has given a more detailed picture of how a management account can help formulate a strategy that helps your business.

Looking for assistance with your management accounts? The team at Ratiobox can help. We provide both shared accounts and outsourced services to suit your preferences. With a fully bespoke contract that’s on your terms, find out more about how we can help your business thrive today. Book your free initial consultation with us.