As part of the overall tax advice and business advice we provide, as expert accountants to the Hotel sector across the North West, we will be issuing a small series of newsletters focussing on specific topics of relevance. In this first edition, we have addressed management accounts and their impact on making informed business decisions.
Introduction
We have prepared this newsletter as the first in our series of quarterly documents aimed at the hotel and leisure industry. We hope that you enjoy reading it.
Here at Ashworth Treasure we have a team of specialists who look after our hoteliers. We have worked with the hotel sector for over 25 years and believe are biggest strengths are our plain speaking and open access to partners. We are also up to date on the latest information affecting the catering and hospitality industry.
Making Informed Decisions
In financially difficult times, we believe that the businesses which prosper are those which have up to date financial information to hand and can make informed decisions rather than making decisions by gut feel or just looking at the company bank balance.
Management Accounts
How can you run a business without them? Isn’t that like driving whilst blind folded!!
You should work together with your adviser to get the best from your in-house accounting team and produce management reports which can take whatever form that is best for you.
This is one of the great features of management accounting — there is no need to conform to any format or layout. You can tailor the management accounting function to your needs. For example, they can be prepared monthly, quarterly or even just 2 or 3 times per year.
They can contain key performance indicators, which can be whatever you want them to be, such as gross profit margin reviews for wet and dry sales; occupancy reports, etc. They can include more than mere financial information, for example customer feedback, or market share statistics.
Perhaps even more useful would be to prepare budgets and then compare with actual performance.
Our aim when working with businesses is to agree an initial format and prepare a “pack” which is used for discussions and then on to decision making. This is not set in stone, we are very flexible and this “pack” can be changed whenever appropriate. We don’t believe in standing still.
Any information produced needs to be provided in a timely manor. There is no use in providing monthly management accounts too late for you to make informed decisions on information they contain.
Our Experiences
Over the last couple of years, we have seen a significant increase in the number of our clients wanting to receive timely management reporting in order to help develop their businesses and reach their strategic goals. In this ever changing climate managers and business owners are seeing how important it is to take an enlightened view as to how well their hotels are performing. They are requesting regular financial documents in user-friendly shape.
Some want accounts on a monthly basis which include a commentary on performance and discussions on problem areas and some need accounts to provide to their bank. Others require accounts every 4 months to help them to keep in touch with their businesses progress.
Feedback from our customers and their bankers is that excellent user-friendly management reports are worth their weight in gold.
If you are a hotelier in Lytham, or further afield in Lancashire or the North West and would like to talk about specific tax advice or general business advice with a specialist firm of accountants, then please get in touch, we’d be delighted to come and see you.