Vince Cable agrees, “Monthly management accounts are essential”

Monthly management accounts are essential to small businesses. The argument that monthly management accounts for sole traders (approximately 70% of all businesses), especially whose income is falling, is superfluous makes no sense. What it means is that monthly management accounts for sole traders should be relatively simple.

Regardless of whether business income is rising or falling, it is vital that at least once-a-month business owners review their financial position based on accurate data, whatever the size of their business.

Most businesses rely on accounting software, which is governed by GIGO (garbage in, garbage out – or – Good In and Good Out). The key to accurate time management information is a  professional bookkeeper, registered with theInstitute of Certified Bookkeepers. Employing a bookkeeper will save money in the long run, and short term:

1. Accounting errors are very much more expensive to sort out, as opposed to “getting it right first time”.
2. Professional bookkeepers reduce annual accounting and audit fees.
3. Monthly management accounts will be
   • timely (at the touch of a button, or at the end of an email)
   • easy to produce
   • accurate

Vince Cable, as reported by  Accountancy Age in its article ‘Cable backs monthly management accounts’, is right to make monthly management accounts an issue. He has come out in support of an initiative called ‘Doing Business Together’. This new organisations has allegedly over 30 active supporters, who all have a vested interest in the SME business sector.

These forums – business workshop discussion sessions – appear to have the support of:

1. BIS – The Department for Business, Innovation and Skills
2. BBA – The British Bankers’ Association
3. DBT Subgroup Panel – Doing Business Together subgroup including high street banks, credit agencies, and credit risk specialists.
   • Lloyds,
   • RBS,
   • Barclays,
   • HSBC and
   • Santander
   • Dunn & Bradstreet,
   • Experian
   • Graydon
   • Euler Hermes,
   • Coface,
   • Atradius
   • Chartis
   • Marsh
   • RK Harrison.