The balance sheet shows the state of the business at a fixed point in time. It provides an opportunity to take a step back, take a deep breath and look at where the business has got to overall. Management accounts often don’t bother with balance sheets. Often management accounts will include just the key balance sheet numbers that need active day-to-day management – Cash, Debtors, Creditors, Stock. But if you do draw up a full balance sheet in your management accounts it might well include the following items:

• Business cash flow
• Profit and loss
• Creating a business plan