What are management accounts?
Management accounts are financial reports for the people who run a business: directors, owners, a board or a lender. They show how the business did over the last month or quarter and where it stands now: profit, cash, what customers owe, what the business owes, and a few key figures.
They are internal. Nobody files them and there is no required format, which is the main difference from the statutory accounts a company files once a year. Both come from the same ledger.
| Management accounts | Statutory (financial) accounts | |
|---|---|---|
| Who reads them | Directors, owners, boards, lenders | Companies House, HMRC, shareholders |
| How often | Usually monthly or quarterly | Once a year |
| Format | Whatever helps the business decide | Set by company law and accounting standards |
| Focus | The last month, to decide the next | The whole year, looking back |
Management accounts format: what goes in a monthly pack
Packs vary, but good ones put the answer first and the evidence after it. A director who reads only the first page should know whether the month was good or bad, why, and what needs a decision.
Summary and key figures
A few lines on how the month went, then KPIs such as revenue, gross margin, net profit, cash and debtor days, each against a comparison period.
Trends
Revenue, profit or cash by month, so one month is read against the months before it.
Profit and loss
The month and the year to date by section, with the change on the comparison period.
Cash and balance sheet
How cash moved since last month end, and the balance sheet by section.
Debtors and creditors
Aged debtors and creditors, with the largest and oldest balances.
Management accounts example: Initech Consulting Ltd, September 2026
Initech Consulting Ltd is a fictional Manchester IT consultancy from Briefcase Ledger’s demo books. Below are the core widgets of its September 2026 pack, from the Monthly management pack template. Its books start in April 2026, so it compares September with August rather than last September. Amounts are rounded to the nearest pound.
Read it from the top. The tiles say September was weaker than August: revenue down 6.6%, gross margin down 16.2 points and net profit more than halved, while cash rose. The chart shows September was still the third-best month of six, and the bridge shows most of the cash came from profit. The profit and loss shows where the margin went: cost of sales rose £5,900. A full pack would add the balance sheet and aged debtors and creditors, as our free management accounts template does in Excel, with the formulas in place.
How to read the KPIs
A KPI is only useful if it is worked out the same way every month. These are the formulas behind Briefcase’s KPI tiles, with Initech’s September figures.
| KPI | How it’s worked out | Initech, September |
|---|---|---|
| Revenue | Revenue as on the profit and loss. | £41,950 |
| Gross profit and gross margin | Revenue less cost of sales; gross margin is gross profit as a percentage of revenue. | £22,650; 54.0% |
| Net profit and net margin | Revenue less all costs; net margin is net profit as a percentage of revenue. | £7,704; 18.4% |
| Cash at bank | The bank account balances. An overdraft counts as negative. | £118,260 |
| Debtor days | What customers owe, without VAT, divided by the last 12 months’ revenue, times 365. | 24 days |
| Creditor days | What the business owes suppliers, without VAT, divided by the last 12 months’ cost of sales and overheads without payroll and depreciation, times 365. | 33 days |
Leave VAT out of debtor and creditor days. Revenue has no VAT in it, so comparing it with balances that include VAT overstates the days by about a fifth. With less than a year of books, scale the months you have to a year: Initech’s six months give 24 days. For a lender or board, EBITDA margin, months of cover, the current ratio and gearing often earn a place too.
Reading the movements and writing the commentary
Tables say what happened; commentary says why, and what to do about it. A common rule is to explain anything that moved by at least 10% and £1,000, then look for what should be there but isn’t. For Initech’s September, that gives:
- Revenue fell £2,950 to £41,950. August included £13,600 of consultancy for Copperleaf Health; September had none.
- Gross margin fell from 70.2% to 54.0%, as revenue fell and subcontractor costs rose £5,900. Is there Copperleaf work still to invoice?
- Accountancy fees are nil, against £375 in every earlier month. Post the accrual before the pack goes out, or say it is missing.
- Cash rose £9,700 to £118,260, but Copperleaf’s £16,320 invoice is overdue, which is most of the rise in debtor days.
Good commentary doesn’t repeat the tables or guess. Where the entries don’t explain a movement, it asks.
Close the month before you produce the pack
A pack is only as good as the month-end close behind it. Before the figures go out:
- Reconcile the bank, so cash agrees to the statement.
- Release prepayments, such as a twelfth of annual insurance each month.
- Accrue costs used but not yet billed. Without them, Initech’s September profit would be £3,841 too high.
- Defer income billed in advance, such as annual support plans.
- Depreciate fixed assets.
- Agree VAT, PAYE and loan balances to their documents, then lock the month.
Our prepayments and accruals guide explains the journals, and the month-end close guide covers each step and what can be automated.
Monthly or quarterly?
Monthly management accounts suit most businesses with employees, stock, borrowing or fast-moving cash, because problems show up while there is time to act. Quarterly can be enough for a small, steady business and lines up with VAT quarters. Either way, keep the same layout and definitions so each pack reads against the last.
Building the pack in Briefcase Ledger
Initech’s pack is a Briefcase Ledger custom report. Choose the Monthly management pack template, a period and a comparison, and the report is built from the books. You can change its widgets and KPIs, write the commentary in a notes widget (Briefcase doesn’t write it; you do, or an assistant connected through the Briefcase MCP in Claude or ChatGPT), and download it as a PDF.
Reports work for books kept in Briefcase Ledger, not Xero or QuickBooks. Each covers one client in sterling, with no consolidation, and downloads as a PDF rather than a spreadsheet. See custom reports and KPIs in the help centre.
White-labelled and branded packs
Set your logo, colours and one of five themes once, and every client’s pack follows it, with an optional cover, contents and a back page with your contact details and the client’s next HMRC dates. For a client reporting to its own board or lender, use its logo and colour instead, or lead with its logo and add “Prepared by” your firm. Page footers still note the pack was prepared with Briefcase. See branding your clients’ reports.
See this pack built from your own books
Briefcase Ledger closes the month and builds the management pack from the ledger.
Frequently asked questions
What is the difference between management accounts and financial accounts?
Financial accounts, often called statutory or year-end accounts, are prepared once a year in a set format for Companies House, HMRC and shareholders. Management accounts are internal reports, usually monthly or quarterly, laid out however helps the directors run the business.
Are management accounts a legal requirement?
No. Directors must keep adequate accounting records, but no law requires management accounts. Lenders, investors and boards often ask for them in their terms.
What should a management accounts pack include?
A summary with the key figures, a profit and loss for the month and the year to date, a balance sheet, how cash moved, and aged debtors and creditors. Commentary on the main movements turns those tables into a report someone can act on.
How long after month end should management accounts be ready?
There is no fixed deadline, so agree one with the people who read them: a pack that arrives after the next month is half over is hard to act on. Most of the time goes on the close, not the report.
Can management accounts compare against a budget?
They often do, if the business has one. Briefcase’s custom reports compare with the previous period or the same period last year, not a budget.
Can I white-label management accounts for my clients?
Largely, yes. A Briefcase Ledger pack’s PDF carries your logo, colours and theme, your client’s logo and colour, or both with “Prepared by” your firm. Each page footer still notes it was prepared with Briefcase.
