This is one area that I am truly passionate about and encourage everyone that I work with to really understand their numbers. If you truly understand your numbers it will be a major contributor to your future success.
Yes we would encourage you to effectively forecast your business and be on top of your accounts so that you can compare your actual numbers with your expectations, forecasts and previous periods
But we also encourage you to better understand your resources and identify the key trends for your business as this is likely to highlight areas that may require attention at an early stage rather than when it may be too late to change a price, review a supply etc.
Your forecast is likely to be your informed estimate, your budget, your planned outcome, but your management accounts show the actual performance and viability of your business.
I would suggest that by the time you receive your annual accounts back from your accountant, then the information may be out of date and irrelevant to what is happening right now. So accurate, up to date, information enables you to make informed decisions to improve your business and impact on your bottom line now.
We have seen the difference management accounts can make to a business for many of our clients.