At the beginning of lockdown one, I wrote a blog on managing your cash flow effectively through challenging times. Many business owners and leadership teams that I engage with used the cash flow model I provided and found it became an essential tool in helping them make critical decisions. 
With the continuation of lockdown three, the next few months look increasingly uncertain so knowing your numbers is even more important. In this blog, I am going to focus on creating a Monthly Management Account Pack. 
Before I take you through creating a pack, let me set out the top three reasons why I believe that it is vitally important to find the time and the motivation to do this. 

Three reasons your business needs a Monthly Management Account Pack: 

Businesses that make the time to do this are far more resilient to financial shocks. 
Gaining a better insight into what is working well and what is working less well enables a business to make better financial decisions more quickly and more decisively. 
Business owners and leadership teams who truly understand their numbers seize the right opportunities and avoid expensive distractions. 

When creating your Monthly Management Account Pack, I would recommend: 

Keeping it simple. 
Making sure everyone in your leadership team understands every section of the pack. 
Investing in professional help to build your pack, if required in the first instance, but never rely on this help going forward. You and your team need to know your numbers better than anyone else. 

What does a good Monthly Management Account Pack look like? 

No two businesses are the same, however, I have attached a sample pack for your reference and I will take you through each section below: 
Key objectives – remind everyone of the important goals you are striving to achieve over the next 12 months. 
Work in progress (WIP) – aka sales pipeline – check where clients are in their buying journey. Is your pipeline growing? Is there trouble ahead? 
Revenue – record how you are performing against budget. How does this year compare with the same period in the previous year? 
New leads – leads are the lifeblood of every business. Are volumes sufficient to grow your WIP? Does the conversion rate indicate that you are maximising every sales opportunity? 
Fee earner performance – monitor individual performance. Are fee earners meeting expectations? If not, what action are you go to take? 
Gross profit – analyse whether or not you are pricing your products and services at the right level. Are you controlling your cost of sales? Is your gross margin in line with your forecast? 
Overheads – look for any surprises. Are there any significant one-offs? What action can you take to reduce your expenditure? 
Net profit – assess if you are on track. Are there any exceptional items that are impacting your net profit? What action are you going to take if you are off track? 
Bank balance – remember that cash is king! Are your cash reserves growing? Do you have enough cash in reserve to deal with unexpected financial shocks? 
Debtors and creditors – keep a record to enable you to see if you are getting paid on time. Are you paying your suppliers in a reasonable time? Are there any big debtors or creditors that may place your business at risk? 
Tax diary – ensure you have made adequate provision for all your taxes. When are your taxes due? 
Profit and loss – this report will allow you to scrutinise revenue and expense trends and overall profitability. Can the company generate profit by increasing revenue, reducing costs or both? 
Key performance indicator (KPI) – this report is a quick snapshot of your performance against the most important targets. It acts as an early warning system. 
If you want to be in control of your business, spot potential problems early and greatly improve your chances of achieving your growth ambitions then you need to find the time to create your pack. What is also critical is to meet with your leadership team on a monthly basis to review the financial performance of your business. 
If you feel you need help creating your Monthly Management Account Pack, then please get in touch and I will be delighted to help. 
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