Management accounts template
Management accounts are the monthly (or quarterly) financial reports a company prepares for its own directors and managers: how the month went against budget and last year, where the cash is, who owes you money, and what needs a decision. There's no required format, unlike statutory accounts. This free Excel pack gives you a standard one.
Running a company of 30 to 200 people? Documents like this are now worth money.
Fill in the P&L, balance sheet, cash and debtor figures; the one-page summary and the KPIs work themselves out.
What's in the template
Seven sheets: Summary (the page most directors read), P&L (month and year to date against budget and last year), Balance sheet (with a check line that should be zero), Cash (against forecast), Aged debtors (by how overdue), KPIs (debtor days, creditor days, current ratio, margins, revenue per head) and a read-me.
The top of a summary page, with fictional figures. F means favourable and A adverse: more revenue or profit than budget is favourable, more cost than budget is adverse.
| September | Actual | Budget | Variance | F/A |
|---|---|---|---|---|
| Revenue | 327,000 | 320,000 | 7,000 | F |
| Gross profit | 156,960 | 153,600 | 3,360 | F |
| Gross margin | 48.0% | 48.0% | 0.0% | F |
| Total overheads | 98,400 | 96,000 | 2,400 | A |
| EBITDA | 58,560 | 57,600 | 960 | F |
What goes in a management accounts pack
- A one-page summary of the key numbers and the commentary.
- P&L for the month and the year to date, against budget and last year, with variances.
- Balance sheet, so you can see debtors, creditors, stock and borrowing moving.
- Cash: where it went and how it compares with the forecast.
- Aged debtors: who owes what, and for how long.
- KPIs: the handful of measures that tell you how the business is doing. See the KPI dashboard template for a fuller version.
Writing the commentary
Numbers without words get misread. Answer four questions on the summary page: what happened this month, why (explain the two or three biggest variances, not all of them), what you're doing about it, and what you need the directors to decide.
The ratios, explained
- Debtor days: trade debtors divided by the last 12 months' revenue, times 365. It's roughly how long customers take to pay.
- Creditor days: the same for what you owe suppliers, against cost of sales.
- Current ratio: current assets divided by current liabilities. Below 1 means short-term debts exceed short-term assets.
- Gross and EBITDA margin: profit at each level as a share of revenue.
Common mistakes
- Reports that arrive too late to act on. Aim to have them within a couple of weeks of month-end.
- No budget to compare against, so nobody knows whether a number is good.
- No commentary.
- Ignoring the balance sheet, where debtor and stock problems show first.
- Missing accruals, so costs land in the month they're paid and months swing wildly.
Frequently asked questions
Are management accounts a legal requirement?
No. Companies must prepare statutory annual accounts (see GOV.UK below), but management accounts are for running the business, in whatever format suits you.
How often should we produce them?
Monthly is usual once a company has a finance function; quarterly can work for smaller or very stable businesses.
What's the difference between management accounts and a board pack?
A board pack includes the management accounts plus everything else the directors need: the CEO's report, risks, and the decisions they're asked to make. See the board report template.