Why Management Accounting? Budgets & Forecasts

Management accounting can be more than analysing production costs and profitability, it can be about budgeting and forecasting too. It can allow you to see what is on the horizon for your firm over the coming months, allowing you to plan and control the destiny of your business.


Budgeting takes the focus away from day-to-day operations and forces long term thinking. It can go a long way in helping achieve your company’s financial goals or organisational strategies. It can assist with the control of income and expenditure of a business by ensuring both fall in line with targets as well as ensuring that the company is utilising its resources effectively. Furthermore, it allows management to see clearly the effect any decision they take is going to affect the financial performance of a business.

For example, changes such as the hire of a new vehicle or employment of a number of staff could be visibly analysed, as well as the impact of selecting cheaper suppliers. It would also allow management to accurately manage any investment decisions and how this would impact their profit or loss for a certain period and ensure it is affordable. Budgets could also go some length in securing funding from your banking provider.

Case Study

Our work with a client in the manufacturing sector, implementing management accounts, allowed them to utilise the budgets, produced by Ammu to make an investment decision.

The client was weighing up the possibility of expanding their property to allow greater production capacity, creating the ability to take on further contracts. Operating without accurate and up to date budgets left them unsure on its viability and resulted in their growth being restricted and profitability minimalised.

However, working with Ammu to produce monthly budgets allowed management to easily assess the impact expansion work would have on their monthly performance and profitability. As such, they could afford to expand and have since increased their capacity, undertaken additional contracted work and have increased profitability.

Ammu are one of Scotland’s leading Management Accounts specialists, with numerous experiences in the implementation and production of Management Accounts.

  • Call us on 01292 388031
  • E-mail via jamie@ammu.uk 
  • Or pop into our office at 8 Miller Road, Ayr, KA7 2AY