What should monthly management accounts include?

Start with an explanation of what matters

Put the important changes near the beginning. A short summary can state the financial result, the main drivers, significant uncertainties and the decisions required. Separate a known cause from a possible explanation that still needs investigation.

This is more useful than “sales up, margin down” because it identifies a working explanation and a next action without claiming the cause has already been proved.

Include performance and financial position

The profit and loss report should make revenue, cost of sales and overheads understandable. Use consistent classifications and show suitable comparisons, such as budget and year-to-date results. A balance sheet adds context about balances and commitments that the period’s profit figure does not fully describe.

Prior-period comparisons need care where there is seasonality, an unusual item or a change in accounting treatment. Call out those differences so management does not mistake them for a change in underlying trading.

Make the reporting period and preparation status clear. If a material estimate is used or an adjustment is outstanding, the reader should know before relying on the figure.

Keep actual cash and the forecast distinct

Show the cash position at a clear date and explain important movements. A forward-looking cash forecast can then help management discuss what may happen next. Label assumptions and distinguish forecasts from actual balances.

Outstanding customer and supplier balances can add useful context, particularly when payment timing is changing. Avoid presenting a list of balances without identifying the items that need attention.

For a worked explanation of the difference, read why a profitable business can still be short of cash.

Choose a small set of relevant KPIs

KPIs should help explain performance or inform a decision. For each measure, agree its purpose, definition, source, owner and review frequency. Keep calculations consistent across periods and document any change.

• Margin: which costs are included, and what explains movement?
• Customer receipts: what is overdue and what requires follow-up?
• Delivery: where do time, rework or capacity affect the result?
• Commercial activity: which operational measures help interpret revenue?

Not every measure belongs in every business. A KPI that cannot be calculated reliably or does not support an action can create more noise than clarity. Start with a few measures and add others only when the need is clear.

End with decisions, owners and follow-up

A reporting pack should support a conversation, not replace it. Record what management decides, who will act and what evidence will show progress. If a question cannot be answered yet, assign the information needed rather than filling the gap with an unsupported explanation.

For example, if a customer appears to have low contribution, the next step may be checking delivery time and cost attribution. It would be premature to change terms before understanding whether the analysis is complete. A profitability review can explore that question in more depth.

Five questions to ask at your next monthly review

1. Are these figures complete enough and current enough for the decisions we are making?
2. Which changes are commercially significant, and which are timing or classification effects?
3. Do we understand why actual results differ from the plan?
4. What has changed in the forward view of cash and performance?
5. Who owns each follow-up action, and when will we review it?

If your current pack does not support those questions, begin with the gaps. Our management accounts and KPI reporting service can help shape the pack and review process alongside your existing team.

Further reading: ICAEW’s business intelligence and management reporting resources explore developing and communicating management information.