Management Accounts: A Strategic Tool for Business Success
“Accounting is the language of business.” (Warren Buffett)
Increasingly, banks and other organisations are requiring businesses to submit up-to-date management accounts when applying for finance. This is because these compact financial reports enable business analysis even when the latest annual financial statements are not yet available.
Management accounts also offer owners and managers timely, accurate and actionable financial insights that facilitate performance evaluation, smart management decisions and informed planning – all of which can transform how your business operates and grows.
What are management accounts?
Management accounts are a set of summarised financial reports. They’re similar to annual financial statements but they aren’t as formal, and they’re produced much more frequently – usually monthly or quarterly.
They’re all about providing relevant financial data for informed business decision-making. As such, there’s no fixed format. Instead, management accounts should summarise and combine the financial reports you need to make smarter decisions.
These financial reports might include some or all of the following.
| What can be included in management accounts? | |
| Income Statement (Profit & Loss) |
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| Balance Sheet |
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| Cash Flow Statement |
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| Key Performance Indicators (KPIs) |
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| Trend Analysis |
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| Variance Analysis |
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| Other |
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| What can management accounts tell you? | |
| Performance |
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| Cash Flow |
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| Profitability |
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| Operational Insights |
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| Control |
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| Planning & Decision-Making |
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The right set of management accounts can do more than record numbers – it can provide meaningful insights that help your business to perform better, plan ahead, and stay in control.
We can tailor your management accounts
We tailor management accounts to your company’s exact reporting requirements, turning your financial data into actionable insights that can not only improve operational efficiency but also create a solid foundation for sustainable growth in your company.
Salary Sacrifice: Why Founders Should Always Pay Themselves
“Paying yourself isn’t selfish, it’s sustainable. The goal is to strike a balance that supports your personal life without compromising the growth of your company.” (Salim Omar, CPA and serial entrepreneur)
Many founders see skipping their own salary as a noble way to fund growth. In reality, underpaying yourself often backfires. Research shows that 82% of small business failures stem from cash flow problems and unpaid founders can mask true costs, distort margins, and create hidden financial pressure – and that’s just the start of it.
What’s the real cost of your time?
When founders refuse to take a salary, they are effectively treating their own time as free. In the scramble to conserve cash, they tell themselves they can wait to be paid until profits improve. But unpaid labour is not free. By not recognising this cost, you skew the economics of your business.
Imagine you hire a manager to take over your duties. Their salary would immediately appear as a line item. By not paying yourself, you are masking a true expense. This can mislead investors, lenders, and even yourself about whether the business model is sustainable and prevent changes that need to be made. Pricing, margins, and growth targets all look healthier than they are, setting you up for shocks later.
This is why savvy investors prefer to see founders compensated fairly. An unpaid or underpaid founder may seem admirable in the short term, but it raises questions about whether they and the company can endure the demands of growth.
Burnout is real
Founders who delay setting a salary usually do so because they are waiting for a day when they feel the business has “earned it.” The problem is that this line keeps moving. There’s always another milestone, another round of investment, or another expense that feels more urgent. Meanwhile the founder is likely eroding personal savings, undermining their career advancement elsewhere and causing stress and sleepless nights in their own home.
A survey by Kruze Consulting of over 200 venture-backed start-ups found that business owners who underpaid themselves for too long often burned out and quit before their companies reached key milestones. By paying yourself out, and minimising the financial risks at home, you can avoid the same fate.
Tax benefits
Not paying yourself a salary isn’t doing the company as many favours as you expect. All expenses put through the company (including salaries) reduce your company’s tax burden, meaning that the benefit you’re providing the company by not taking a salary is significantly smaller than you think.
As a general rule, it’s advised that you take 50% or less of the business’ net profits as compensation and save the rest for reinvestment, but each company is different. As your accountants, we can help you to structure the salary you pay yourself to ensure that the greatest benefit is achieved for all concerned – thereby lessening any guilt you may feel for taking a salary before the business is “ready”.
The effect on morale
One of the more surprising aspects of not paying yourself a salary is the impact it has on staff morale. Salaries are a hot topic in any business, and the founder’s salary is carefully watched by all who work there. Paying too much to the CEO or founder can lead to resentment, with staff feeling that difficulties on the floor are not shared in the board or that the effort at lower levels is not being adequately compensated.
Likewise, founders who take no salary, or a significantly reduced salary, instil distrust and fear among employees who begin to suspect that the company is struggling and likely to go under. This can lead to job-security worries, lower job satisfaction, increases in absenteeism, quiet quitting and higher than normal staff turnover – all of which will impact the business’ bottom line.
Paying yourself is paying your business
Refusing to take a salary may feel like dedication, but over time it will eat away at both you and your company. Underpaying yourself masks the true cost of operations, distorts financial planning models, breaks employee morale and increases the risk of burnout. Setting a realistic salary is not selfish, it is a structural choice that strengthens transparency, stability, and resilience.
Let data guide the choice. Track your revenue, costs, and cash flow. And compare your compensation to industry benchmarks for founders at similar stages.
Businesses survive when their leaders are healthy, focused, and honest about costs. By recognising your worth and paying yourself accordingly, you are not taking from the business, you are ensuring it has a solid foundation on which to grow.
This Halloween, Stay Safe From eFiling Profile Hijackings
“Profile hijacking points to pervasive cybercrime with global links.” (Edward Kieswetter, SARS Commissioner)
The Tax Ombud has again warned South Africans about the concerning increase in eFiling profile hijackings, which has spurred the Office of the Tax Ombud (OTO) to launch a survey of taxpayers’ experiences and a systemic investigation into SARS.
What is eFiling profile hijacking?
eFiling profile hijacking involves cybercriminals gaining unauthorised access to taxpayers’ SARS eFiling accounts. Once inside, they change the security details and banking information, and submit fraudulent tax returns to redirect the refunds into their own accounts.
Methods such as SIM swaps and phishing are commonly employed to get access to taxpayers’ eFiling profiles. Using calls and fraudulent SARS text messages, emails and letters of demand, scammers pose as SARS officials or tax advisors, often pretending to want to assist taxpayers to get their SARS refunds.
Concerns have also been raised about possible internal fraud and insider involvement at SARS and certain banks.
SARS systemic investigation
While SARS acknowledges the rise in eFiling profile hijackings, it emphasises that although individual profiles have been compromised, the SARS system itself has not been breached.
SARS adds that additional security measures have been implemented and that it is collaborating with financial institutions and the OTO to combat the scourge of profile hijacking.
How to safeguard your eFiling profile
SARS has issued the following advice:
- Avoid sharing your eFiling login details. SARS will never request OTPs, passwords or bank details via calls, emails or text messages.
- Use strong and unique passwords and update them regularly.
- Enable two-factor authentication for an additional layer of security.
- Regularly check your eFiling profile and submitted returns for any unauthorised changes.
- Verify your bank account on eFiling before a refund is paid, even if there was no change to the banking details.
- If you suspect your profile has been hijacked, change your login credentials promptly using another device, and report it immediately to SARS and to the SAPS as an identity theft case.
