The Xero accounting platform is a great tool for preparing management accounts. These reports are useful for your internal staff as well as for your accountant.

Management accounts allow you to see what’s going on at a glance in your business and see instantly any areas of improvement and potential money saving.

We’re often asked about preparing management accounts in Xero. So this guide will help you get to grips with it.

What are management accounts?

Unlike statutory end-of-year accounts, which all limited companies must submit to HRMC, management accounts aren’t mandatory. But they are very useful for internal assessment.

The use of management accounts (particularly those produced using real-time data from Xero) is key to keeping your finger on the financial pulse of your business.

Management accounts are often produced quarterly but can be monthly or more often, depending on your wishes. For details about managements, check out our blog about them.

What’s included?

Management accounts using the software should include an executive summary. This is where, at a glance, you’ll see turnover, cash at bank and operating profit for the period.

You should also see KPIs (key performance indicators), profit and loss, a balance sheet and a cashflow statement.

Management accounts in Xero

With all your real-time financial data stored in Xero, and a host of reports available at the push of a button, it doesn’t take long to produce a simple management accounts report.

The Report Templates feature allows you to select a series of different reports and bundle them into one package, complete with a professional looking title page and contents section.

To set up a template, click ‘Reports’ in Xero and then click ‘New Template’. Give the template a name, then simply choose the standard reports you want to include as part of the pack – balance sheet, P&L and cash flow statements are all available.

All that remains is to select the date range to ‘Last Month’, and click ‘Ready to Use’. Your reports update automatically, so whenever you view them, you can be sure you’re making decisions based on the very latest data.

By preparing your management accounts with Xero, you’ll save time and ensure you’re using the most up-to-date information. And that is crucial when making key decisions.

If you would like more information about using Xero, contact us today.