Management accounts that directors actually use: 6 numbers to review monthly (and what actions they drive)

If your management accounts feel like a pack you should read (rather than something you want to read), it’s usually not because you’re “not a numbers person”. It’s because the reporting isn’t built around decisions.

As a director, you don’t need 30 tabs and 200 lines of detail every month. You need a handful of measures that tell you what’s happening, what’s changing, and what you should do next — while there’s still time to act.

If the foundations are right (clean reconciliations, consistent coding, invoices up to date), these 6 numbers give you a monthly dashboard you’ll actually use. That starts with getting the basics nailed via solid bookkeepers or a system-led approach like Xero bookkeeping.

1) Turnover (monthly and year-to-date)

What you’re looking for

• Turnover for the month vs last month
• Turnover vs the same month last year
• Turnover vs your target (even a simple one)

Why it matters
Turnover is your early warning system. It tells you whether demand is holding up and whether your pricing and pipeline are translating into real sales.

Actions it should drive

• If turnover is up but cash is tight: your collection process is likely the issue (see debtor days below).
• If turnover is down: don’t wait 3 months to “see how it goes”. Review pipeline quality, pricing, and activity levels now.
• If turnover is flat but workload is rising: you may be underpricing or over-servicing.

If you’re still running this from spreadsheets, moving into a live system makes monthly reporting far less painful. This guide on from spreadsheets to Xero is a practical starting point.

2) Gross profit margin (and what’s moving it)

What you’re looking for
Gross profit % = (Sales – Direct costs) ÷ Sales

Why it matters
Margin often drifts quietly — supplier costs creep up, discounting becomes normal, delivery takes longer than planned, or stock/COGS isn’t being handled consistently.

Actions it should drive

• If margin drops: review pricing, supplier terms, and how you scope work.
• If margin is strong but net profit is weak: overheads are eating the benefit (see net profit below).
• If margin swings month to month: you might need better job costing or tighter processes.

If you’re using Xero, tracking profitability properly is much easier when you set up projects and categories the right way. This guide to Xero Projects and tracking categories is a useful reference.

3) Net profit (and profit per £1 of sales)

What you’re looking for
Net profit (or operating profit) and net profit %.

Why it matters
Net profit tells you whether the model works after overheads. It also feeds tax planning, investment decisions, hiring, and how much you can safely extract.

Actions it should drive

• If profit is down: separate one-off costs from ongoing overhead before you start cutting.
• If profit is up: decide what it’s for — cash buffer, recruitment, investment, debt reduction, or dividends.
• If profit is consistently thin: you may need a pricing reset, a tighter service offering, or to redesign how delivery is resourced.

For limited companies, profit links directly into Corporation Tax planning. The rules changed on 1 April 2023 (main rate 25%, small profits rate 19% below £50,000, with marginal relief up to £250,000), so it’s worth understanding how it applies to you — here’s FHP’s explainer on the Corporation Tax small profits rate.

4) Cash in bank (and “runway”)

What you’re looking for

• Current cash balance
• Cash runway = cash ÷ average monthly cash outgoings
• Whether cash is improving or deteriorating

Why it matters
Profit doesn’t pay wages — cash does. Late payment is still a real pressure point in the UK. In research published in July 2025, the Office of the Small Business Commissioner reported that 22% of surveyed businesses spent staff time chasing late payments, averaging 86 hours per business affected each year.

Actions it should drive

• If runway is under 2–3 months: tighten collections, delay non-essential spend, and look at funding early (before you need it).
• If cash is strong: decide what it should do — buffer, invest, or pay down liabilities.
• If profit is up but cash is down: check stock build-up, slow-paying customers, VAT timing, or costs being paid earlier.

If you want someone keeping a steady eye on cash, reporting, and forecasting (without hiring a full finance team), an outsourced finance department can be the sweet spot.

5) Debtor days (and total overdue invoices)

What you’re looking for

• Debtor days ≈ (Trade debtors ÷ credit sales) × 30
• Total overdue invoices, plus an ageing view (0–30, 31–60, 61–90, 90+)

Why it matters
This is often the fastest lever you can pull to improve cash without increasing sales.

Actions it should drive

• If debtor days creep up: invoice faster, tighten payment terms, and make credit control weekly (not “when it gets bad”).
• If 1–2 customers dominate overdue balances: agree an escalation path and stick to it.
• If disputes are common: improve proposals, contracts, sign-off, and handover notes.

You can also reduce delays by automating the basics. Xero has tools for recurring invoices and reminders — this post on automations in Xero covers simple ways to streamline.

6) Working capital snapshot (what’s coming due soon)

What you’re looking for

• Current assets (cash + debtors + stock)
• Current liabilities (trade creditors + VAT + PAYE + loans due within 12 months)
• A simple view of whether you can comfortably pay what’s due

Why it matters
Working capital is where profitable businesses still get squeezed. VAT, PAYE, suppliers, and loan repayments can land before customers pay you.

Actions it should drive

• If liabilities rise faster than assets: improve collections, review supplier terms, and reconsider growth pace.
• If VAT is a recurring shock: forecast it monthly and don’t treat it like “money in the bank”. FHP’s VAT return services are built to keep filings accurate and reduce last-minute pressure.
• If payroll liabilities are growing: make sure your monthly payroll process is consistent and compliant — FHP’s payroll services can help keep this smooth.

What your monthly “director view” should look like

In practice, you want a 1–2 page summary that answers:

• Are sales up or down?
• Are we making enough on each £1 of revenue?
• Are overheads under control?
• Is cash improving?
• Are customers paying on time?
• What’s coming due that could catch us out?

Then you only go deeper when a number moves.

Your year-end compliance pack has its place too — but it’s a different job. If you want a quick comparison, FHP’s guide on what statutory accounts are explains the difference clearly. And if you want your compliance sorted without headaches, it’s worth having annual statutory accounts and company secretarial services handled properly, so nothing slips.

FAQs

How quickly should you be able to review management accounts each month?

You should be able to review the key numbers in 15–30 minutes. If it takes longer, the pack is usually too detailed or not structured around decisions. Keep a deeper pack behind the summary if you want it — but your first view should be quick and clear.

What’s a realistic deadline for monthly management accounts?

Many businesses aim for management accounts within 10–15 working days of month-end. The earlier you review, the faster you can act. If your numbers arrive too late, you end up running the business on instinct and using accounts only to confirm what already happened.

Should management accounts be cash basis or accruals?

For performance (profit), accruals are usually best because they match income and costs to the right period. But you should always keep a simple cash view alongside it, because cash timing is what creates day-to-day risk.

Can management accounts help you plan tax more effectively?

Yes — not by “magic savings”, but by giving you visibility early enough to plan properly. For limited companies, your profit level drives Corporation Tax planning and timing. That’s where accurate monthlies and tidy company tax returns work together. If you also have other income streams, your personal tax returns should align with the bigger picture.

What if your bookkeeping isn’t up to date?

Then your management accounts won’t be reliable — and you’ll either ignore them or (worse) act on the wrong information. Getting reconciliations and coding consistent is usually the fastest route to better decisions. This article on why accurate bookkeeping matters explains the knock-on benefits in plain English.

If you want management accounts that actually help you run the business (not just a report you file away), speak to FHP Accounting. You can contact us to book a chat about what you need monthly, how quickly you need it, and how to set up a simple director dashboard you’ll genuinely use.

Kellee Quigley

I lead FHP Accounting, an accountancy practice specialising in Commercial and Residential Property Accounting. Our goal is to make the administration of running property portfolios easier for landlords, managers, and investors — allowing you to focus on what you do best, while we take care of everything behind the scenes.