Finance Transformation
What Good Management Accounts Look Like
1 October 2025
Management accounts are the monthly or quarterly financial statements produced for internal use. Unlike statutory accounts, there is no prescribed format. The freedom to design them for the specific needs of the business is an advantage that most businesses do not use.
Most management accounts are built around the format the accountant knows, not the format the business needs. They are often too detailed in places where detail does not help decision-making, and not detailed enough in the places it does. They tell you what happened but not why. They present numbers without context and expect the reader to supply the narrative. This is how finance functions that lose trust begin: producing reports that nobody finds useful.
Good management accounts are a management tool. They exist to help the people running the business make better decisions. Everything else is secondary.
The structure that works
Start with the headline. The first thing in the management accounts should be the most important thing: how is the business performing against budget and against the same period last year? A simple summary on the first page, with revenue, gross margin, EBITDA, and net profit in four lines against two comparatives, gives any reader the essential picture in thirty seconds.
Revenue analysis by meaningful segment. Revenue by product line, by channel, by geography, by customer type: whatever segmentation is commercially relevant to the business. A single revenue line tells management nothing they can act on. Revenue by channel tells them which parts of the business are growing and which are not.
Gross margin by segment. Revenue growth with deteriorating margin is a warning signal. Revenue decline with improving margin is a different business challenge. The blended gross margin hides both. Breaking it out by segment, using the same segmentation as the revenue analysis, is where management accounts earn their usefulness.
Cost analysis by category. Overheads split into meaningful categories with prior period comparatives. The level of detail should reflect the level at which decisions are made. A business where the MD approves all significant expenditure needs different cost visibility than one where budget holders manage their own lines.
Cash and working capital. Cash position, debtor days, creditor days, and stock days where relevant. Management accounts that do not include cash are incomplete for any business where cash is a constraint, which is most businesses.
Forward look. A one-page view of the next three months: expected revenue, known cost commitments, forecast cash position. Management accounts that only look backward are half the tool they should be. These are also the numbers that feed into board packs.
The commentary
Numbers without commentary are evidence without a verdict. The commentary should explain the variances, not just describe them. “Revenue is 8% below budget” is a description. “Revenue is 8% below budget due to the delayed launch of the new product line, which has now shipped and is expected to recover the shortfall in Q3” is an explanation that allows management to act.
Commentary should be brief and direct. Two or three sentences per key variance, written for a business reader not an accountant. If the commentary takes longer to write than the accounts took to produce, the accounts need to be simpler.
What to leave out
Management accounts accumulate content over time. Every request for a new analysis gets added and nothing gets removed. After a few years the pack is forty pages, takes two weeks to produce, and nobody reads all of it. That two-week production cycle is itself the cost of a slow close compounding into a reporting problem.
Strip it back. If a section has not been referenced in a management meeting in three months, it is probably not needed. If a table takes more than thirty seconds to interpret, it needs to be redesigned or cut.
The test for every page: does this help someone make a decision? If not, it should not be there.
Maebh Collins is a Chartered Accountant (FCA, ICAEW) and finance transformation specialist who has designed management reporting frameworks for businesses from €3m to €650m turnover.
Maebh Collins is a Chartered Accountant (FCA, ICAEW), Big 4 trained, with twenty years of experience building and running international businesses. She specialises in finance transformation, ecommerce operations, and digital strategy.