A monthly management pack for partners
What a consultancy's partners can read each month from Achekam's management accounts, how budgets sit beside actuals, and what is still missing.
By Achekam · · 5 min read · For Consulting businesses in South Africa, Nigeria, Kenya
Partners in a consultancy want a handful of answers each month. Did we make money? Is the work turning into cash? Are we where we planned to be? A management pack should answer those in a few pages, straight from the books, without someone building it by hand the night before the meeting.
This article sets out what Achekam's management accounts give you today, what they do not, and how to put together a dependable monthly pack around those limits.
Income statement against the prior period
Achekam's management accounts show an income statement for a period you choose, set beside the period before it. The figures are added up from the business's own journals, so they are the same numbers your accountant sees in the ledger.
Comparing a month with the month before is a quick way to spot movement: a jump in subcontractor costs, a fall in fee income in a quiet month, travel creeping up. It does not show seasonality, though. For a consultancy whose work is uneven through the year, the comparison with budget described below matters more than the comparison with last month.
The balance sheet at period end
The management accounts also show a balance sheet at the end of the period, again built from the business's own journals. Both statements export as PDF or CSV. The PDF suits the partners' pack; the CSV suits whoever wants to add commentary or charts.
For a consultancy, the lines to read first are bank and debtors. Long payment terms mean profit and cash can be far apart, and the balance sheet is where that shows.
The year-to-date preset starts in January
The year-to-date preset starts on 1 January, not on your own financial year start. If your year begins in any other month, the preset gives the wrong year-to-date figures. Set the period yourself, from your real year start to the month end, and save yourself an awkward correction in front of the partners.
No cash flow statement or year-end close yet
Two gaps are worth explaining to the partners up front:
- No cash flow statement. The books do not produce one. For a consultancy that is a real gap. Until it closes, use the month-on-month movement in bank and debtors on the balance sheet, together with the debtors age analysis, which groups what clients owe into 0-30, 31-60, 61-90, 91-120 and over 120 days, as your view of cash.
- No year-end close. There is no closing entry: profit is not closed to retained earnings and shows as its own line on the balance sheet. After the first year, that line holds accumulated profit rather than the year's profit alone. Your accountant deals with this in the annual financial statements; the partners simply need to know why the balance sheet looks the way it does.
A third point avoids confusion. The Accounting Reports library lists report types, among them a management pack and a debtors age analysis, but generating one there creates an empty report in the browser without reading the ledger. Use the management accounts screen for the monthly figures, not that library.
Budgets beside actuals
Achekam lets you set a budget for each account and period and compare it with the actual figures in the ledger. Budget at the level the partners actually discuss: fee income, salaries, subcontractors, travel, rent and the few other lines that move. A budget with every account in it gets ignored; one with the lines that matter gets read.
A budget comparison answers the question the month-on-month view cannot: are we where we planned to be at this point in the year? Variances like these are at the heart of management accounting, which AccountingTools describes as the internal reporting that tracks revenues, expenses, variances and other measures to help managers act.
Before the pack goes out
Run the trial balance for the period first. It shows each account and says whether debits equal credits. If something in the income statement looks odd, the general ledger lists every posted line behind it.
Then close the month. A closed month refuses postings from every source, and reopening a hard close needs a second approver, so the figures the partners discuss cannot shift underneath them after the meeting.
A note for Nigerian and Kenyan consultancies
At present the ledger screens show every amount in rand, and the chart of accounts is stored in ZAR, even for a Nigerian or Kenyan business. Bear that in mind when reading the screens and when preparing the pack, and agree with your accountant how the exported figures should be labelled for the partners.
Commentary that partners will read
Figures without commentary invite every partner to draw their own conclusions. Add one page in plain words, written by whoever knows the books best. Say what moved this month and why: a large engagement finishing, a new hire starting, a client paying late. Say what is coming that the figures do not yet show, such as a signed engagement that starts next month. And say what needs a decision. Keep it to facts that can be checked against the figures; the meeting is for opinions.
The pack in six parts
- Income statement for the month, beside the month before.
- Income statement for the year to date, from your own year start.
- Budget against actual for the main lines.
- Balance sheet at month end.
- Debtors age analysis, with a word on the oldest balances.
- One page of commentary: what moved, why, and what the partners need to decide.
Two items often explain surprises in the pack. Short payments from clients who deduct withholding tax leave balances open in debtors; see when a client pays you net of withholding tax. And staff costs include expense reimbursements paid through payroll, covered in consultants' expense claims repaid through payroll.
Set budgets for the rest of the year, then build next month's pack from the management accounts screen in the six parts above.
General guidance only, not advice on your own circumstances. Tax and payroll rules change: check the current position with the authority or your adviser.
