What are management accounts?
The monthly reports that run a business, explained.
Quick answer
Management accounts are internal financial reports, usually monthly, that show how the business is performing so managers can make decisions. They typically include a profit and loss against budget, a balance sheet, cash flow, aged debtors and creditors, KPIs and commentary. Unlike statutory accounts, they have no required format and are produced quickly after month end.
Management accounts vs statutory accounts
| Management accounts | Statutory accounts | |
|---|---|---|
| Audience | Owners, managers, board, lenders | Shareholders, tax authorities, public register |
| Frequency | Monthly or quarterly | Annually |
| Format | Whatever helps decisions | Set by law and accounting standards |
| Speed | Days after month end | Months after year end |
| Forward-looking | Often includes budget and forecast | Historical |
What to include
- Summary and commentary
- P&L for the month and year to date, with budget and prior year
- Balance sheet
- Cash flow and cash position
- Aged receivables and payables
- KPIs
See the broader discipline of management accounting for the theory, and our free template for the practice.
For groups
Groups need management accounts for each company and for the group as a whole. That's where most spreadsheet processes break down, and where Joiin and similar tools help. Read our Xero management accounts guide.
Frequently asked questions
Are management accounts a legal requirement?
No. They're internal reports, though lenders and investors often require them under the terms of a facility or investment.