What are we talking about? The management balance sheet is one of the main financial statements along with the income statement (IPL) and the cash flow statement (CFS). It is a full-fledged system for collecting information about the company's position, what its money is spent on and in what amount.
What to pay attention to? It is a mistake to think that only accounting can cope with these tasks, because this type of analysis does not always indicate the real state of affairs. That is why it is important to use different types of reports and complement them with each other.
The article explains:
What is a management balance sheet?
Why Management Balance Is Important: Real-Life Examples
5 Differences Between a student data package Management Balance Sheet and an Accounting Balance Sheet
2 types of assets
2 types of liabilities
Features of the formation of management balance
Statistical and dynamic management balances
Liquidity and accounts receivable in the management balance sheet
3 Methods of Compiling Management Reports in an Enterprise
7 stages of development and implementation of management accounting at the enterprise
Common Mistakes When Implementing Management Balance Sheet
Example of drawing up a management balance sheet in Excel
Management balance analysis
The problem of management accounting in a "group of companies"
Frequently Asked Questions about Management Balance Sheet
5 Scenarios for Using Neural Networks to Increase Website Conversion by 40%
Download for free
What is a management balance sheet?
A financial statement that shows everything a company owns and what its liabilities are is called a management balance sheet. Sometimes the term "balance sheet" is used instead of "accounting" or "report". Looking at it, you can understand what financial condition the organization is in at the current time.
The frequency of such a report depends on the size of the organization. Small-scale businesses require more frequent monitoring, usually monthly, while large companies issue such a document once a year.
Management accounting is a systematic collection of data and subsequent formation of information about the activities of the enterprise. Since management decisions are made on the basis of the information received, the data must be complete and objective.
Management balance
Source: shutterstock.com
This system also helps manage costs at the center level, control the company's solvency and liquidity, its debts and financial flows. Management accounting information is a commercial secret at almost all enterprises, so its disclosure is not permitted.
The main tasks of the management balance
The management balance, similar to a patient's medical record that provides information about his health, shows the state of affairs of the organization in financial terms. It allows:
find out how much of the company's own funds are available and how much is in the form of accounts receivable and inventory;
understand the proportion of equity and borrowed funds invested in the business and what they were spent on;
monitor debt obligations to credit institutions;
identify the property owned by the organization that can be sold if there is a need to urgently pay off the debt;
calculate financial indicators such as asset liquidity, profitability, solvency, etc.
With all this information, top management will be able to competently and correctly plan budgets, manage risks and make strategic decisions.