I often tell clients that management accounts are like a torch in a dark room — they don’t have to be perfect or beautiful, but they must show you where the furniture is so you don’t trip over it. A simple, well-structured management accounts pack gives you the essential information to make confident, timely decisions without drowning in numbers. Here’s how I build a practical pack for small UK businesses that you can adapt to your own needs.
What a “simple” management accounts pack actually is
When I say “simple”, I mean focused and actionable. The pack should give you a clear view of your profitability, cash position, major variances versus plan, and a handful of meaningful KPIs. It’s not an auditor-ready set of statements — it’s a working document for you, your bookkeeper and your adviser.
A useful pack typically includes:
- Profit & loss (P&L) for the period and year-to-date (YTD)
- Balance sheet summary — key assets and liabilities
- Cashflow and bank reconciliations or cash position
- Budget/forecast vs actual variances
- Short commentary with actions and risks
- A small dashboard of KPIs
How often should you produce the pack?
I recommend monthly for most micro and small businesses. Monthly reporting gives you early warning of cash issues and allows you to act before a small problem becomes a crisis. If you’re very early-stage or low transactions, quarterly may suffice. For seasonal businesses, a monthly cadence through peak months is essential.
Step-by-step: building the pack
Here’s the workflow I use. It’s deliberately lightweight so it can be maintained without a dedicated finance team.
- Collect the source figures — bank statement, sales ledger, purchase ledger, payroll summary, and any accruals or prepayments you track.
- Produce a simple P&L: group income and costs into the handful of categories that matter for your business (e.g., Sales, Cost of Sales, Gross Profit, Overheads broken into Rent, Wages, Marketing, Professional Fees).
- Prepare a balance sheet summary: bank balances, debtors, creditors, tax liabilities (PAYE/NI, VAT), and any loan balances.
- Reconcile the bank balance in your accounts to the actual bank statement; note any unpresented items.
- Compare actuals to budget/forecast and prior period, and produce a short variance analysis (what happened, why, and what we will do about it).
- Update your dashboard of 5–8 KPIs.
- Write a one-page management commentary highlighting key decisions, risks and required actions.
What to include in the one-page commentary
I keep the commentary short and practical — it should be the first thing a non-finance founder reads. My structure is:
- Headline: one sentence that sums up the month (e.g., “Revenue up 12% but cash down due to seasonal supplier payment”).
- Key movements: two or three bullet points explaining major variances.
- Risks and actions: what needs attention and who will do it.
- Decision points: items where you need a decision this month (e.g., delay a hire, renegotiate supplier terms).
KPIs that actually matter
Too many KPIs dilute focus. Choose metrics that tell you whether your business model is working and whether cash will be OK. Typical small business KPIs I use are:
- Gross margin %
- Net cash at bank
- Receivable days (Debtor days)
- Payable days
- Run rate cash burn or runway (months at current monthly loss)
- Sales growth % month-on-month
You can add bespoke KPIs — for retail that might be transactions per day, for agencies it might be utilisation or billable utilisation.
Simple P&L layout (example)
| Category | Month | YTD | Budget YTD | Variance |
|---|---|---|---|---|
| Revenue | £25,000 | £150,000 | £160,000 | -£10,000 |
| Cost of Sales | £8,000 | £48,000 | £50,000 | -£2,000 |
| Gross Profit | £17,000 | £102,000 | £110,000 | -£8,000 |
| Overheads | £12,000 | £72,000 | £68,000 | +£4,000 |
| Net Profit | £5,000 | £30,000 | £42,000 | -£12,000 |
Tools and templates I recommend
If you’re using cloud accounting like Xero or QuickBooks Online, you can pull most of the numbers directly. Both platforms have useful reports, but I usually export to Excel or Google Sheets for a simple pack so I can add commentary and a compact dashboard.
For those who prefer templates, I keep a lightweight management accounts template in Google Sheets that links your exported trial balance to a tidy P&L and balance sheet, with simple formulas for variance and KPI calculations. The advantage of Sheets is easy sharing and version control; Excel works fine too if you prefer offline files.
How to handle accruals, prepayments and one-offs
Small businesses frequently swing month-to-month because of timing items. I record simple accruals where management decisions depend on them — for example, accrued utilities or an invoice due for services already received. I avoid trying to match every small prepayment unless it materially affects the numbers.
One-offs (e.g., a rare legal fee or a sale of an asset) should be shown separately or highlighted in a footnote so they don’t distort trend analysis.
Variance analysis: keep it practical
Variance analysis is where the pack becomes a decision tool rather than a statement. For each material variance I ask:
- Is this a timing issue or a structural change?
- Is it controllable or external?
- What immediate action, if any, is required?
Document the answers in one or two lines next to the variance. For example: “Marketing overspend £2k — paid for a PPC test that returned no conversions; pause PPC pending review.” That tells the owner exactly what to do.
Visuals that help (and those that don’t)
A simple chart of monthly revenue and gross margin helps spot trend changes quickly. Avoid over-decorating — too many charts or fancy dashboards can hide the story. I usually include one revenue trend chart, one cash trend chart and a small KPI tiles section.
Who should see the pack and how to present it
The pack is for owners, managers and advisers. I share it as a PDF or Google Sheet link before a monthly review meeting and keep the commentary top-of-page so readers can decide whether they need deeper detail. In the meeting, focus on the three things that need action this month — decisions, mitigations and owners.
Finally, make it a living document. If a line item or KPI never gets looked at, remove it. The aim is to inform decisions, not generate reports for reports’ sake. If you want, I can share a sample Google Sheets template you can adapt — tell me your business type and I’ll tailor the KPIs and categories to match.
