Issue:

How are Management Accounts Produced?

Resolution:

Management Accounts may be produced using the same set of accounts that produces the Financial Statements or a separate copy of that set of accounts. To copy a set of accounts, right click on the set of accounts that you want to copy (on the Clients and Accounts screen), select Copy, then right click again and select Paste. Rename the new set of accounts. The advantage of using the same set of accounts is that the financial and management accounts are integrated and therefore consistent. The disadvantage is that the production of management accounts may be dependent on awaiting the completion of the finalisation process for the Financial Statements.

How are Management Accounts Produced?

Introduction

Management Accounts may be produced using the same set of accounts that produces the Financial Statements or a separate copy of that set of accounts. To copy a set of accounts, right click on the set of accounts that you want to copy (on the Clients and Accounts screen), select Copy, then right click again and select Paste. Rename the new set of accounts. The advantage of using the same set of accounts is that the financial and management accounts are integrated and therefore consistent. The disadvantage is that the production of management accounts may be dependent on awaiting the completion of the finalisation process for the Financial Statements.

Periodic Management Accounts

There are different types of periodic management accounts:

• Profit and Loss Account and Balance Sheet variance analyses between current selected period(s) and corresponding comparative period(s): this report shows (1) the current selected period or range of periods, (2) the corresponding comparative period or range of periods, (3) the variance by amount between those two amounts, (4) the same variance by percentage, (5) the cumulative current periods up to the last selected period, (6) the corresponding cumulative comparative periods up to the last selected period, (7) the variance by amount between those two cumulative amounts and (8) the same variance by percentage.
• Profit and Loss Account and Balance Sheet Variance analyses between current and budget for the selected period(s): this report shows (1) the current selected period or range of periods, (2) the budget for the period or range of periods, (3) the variance by amount between those two amounts, (4) the same variance by percentage, (5) the cumulative current periods up to the last selected period, (6) the cumulative budget for the periods up to the last selected period, (7) the variance by amount between those two cumulative amounts and (8) the same variance by percentage. Profit and Loss Account showing all periods without selection (static periods) up to last posted period and Year-to-Date.

Journal entries using the separate Accruals and Prepayments routines will be posted to the selected period and will automatically reverse on the first day of the following period. 

To set up the periods, go to Tools/Period Dates. The From Date and To Date in the header should define the financial year/period. Enter the No. of Periods and click on Generate. The number of periods may be 1, 2, 3, 4, 6, 12 or 13. An entry of 1 will not define any management periods other than the financial period itself. An entry of 2 defines half-periods; an entry of 4 defines quarters and an entry of 12 defines months. The descriptions and To/From Dates for each period may be adjusted, but must be contiguous. Click on OK when completed.

If you are going to produce the Periodic Comparative Management Accounts, you will need to make sure the comparative entries are split between the periods. If this is the first time you are preparing such accounts, you must go to the Nominal Ledger screen, click on Comparative Periods and enter the split of comparatives across the periods. Enter minus signs for credits. The total for each period must be zero. (After running the Year-End routine, these comparative period amounts will be replaced by the current period amounts.)

If you are going to produce the Periodic Budget Management Accounts, you will need to enter the budgets by going to the Nominal Ledger screen, clicking on Budgets and entering the budgets across the periods. Enter minus signs for credits. The total for each period must be zero.

When posting journals, select the date of the end of the period into which you require the postings to be made.

On the Produce Accounts screen the various Periodic Management Accounts options will appear. To run the Periodic Comparative Management Accounts or the Periodic Budget Management Accounts, first click on the Period button and select the period range you require. For a single period, the Period From and Period To entries will be the same. Then click OK. Then run the Periodic Comparative Management Accounts or the Periodic Budget Management Accounts. To run the Static Periodic Profit and Loss Accounts Management Accounts, no period selection is required – it will prepare the accounts for
all periods for which there are postings including the Year-to-Date amounts.

Cost Centre Management Accounts

The Cost Centre Management Accounts comprises the Profit and Loss Account, Trading Statement and Balance Sheet for each Cost Centre that has been set up.

To set up Cost Centres, go to Tools/Settings. Tick “Use Cost Centre”. You may then create Cost Centres by clicking on the hyperlink “Default Cost Centre” (or by clicking OK and going to Tools/Lookups/Cost Centre). Click on Add and then enter a Code and Description. Repeat the process for each Cost Centre. Make sure a Default Cost Centre is showing in Settings. Click OK on completion.

To get comparatives into the appropriate Cost Centre, go to the Nominal Ledger screen, click on Comparatives, select the appropriate Cost Centre and make the entries. If the Comparatives are already entered for the combined entity, you may copy those entries to the Default Cost Centre by clicking on the button “Copy these Comparatives to …”. Enter minus signs for credits. The total for each year must be zero.

When posting journals, select the appropriate Cost Centre in the header of the Journal or
on each line according to the Journal type being used.

On the Produce Accounts screen the Cost Centre Management Accounts option appears. First, click on the Cost Centre Analysis drop down arrow and select the Cost Centre for which you want to produce the Cost Centre Management Accounts. You also have the option to select “All”, which will produce the Profit and Loss Account for each Cost Centre followed similarly by the Trading Statement and Balance Sheet. You may also select Combined to produce the combined statements.