The short answer
Management accounts and advisory support means a Warranted Accountant prepares your monthly numbers and then works through what they mean with you, a few days a month instead of full time. In Malta that usually covers your management accounts, cash flow forecast, compliance calendar and the packs your auditor and your bank ask for.
It fits the business that has outgrown a bookkeeper but can't justify a full-time finance director. If you are making decisions off last year's numbers, this is the gap it fills.
Bookkeeper, management accounts or a finance director
These three options get mixed up all the time. The difference is what each one is responsible for.
| Role | Bookkeeper | Management accounts & advisory | Full-time finance director |
|---|---|---|---|
| Main job | Record what happened | Report what it means and what to do next | Run the finance function in house |
| Looks at | Past transactions | Past, present and forecast | Strategy, funding, team |
| Typical time | Weekly or monthly | A few days a month | Full time |
| Reports and forecasts | Basic reports | Management accounts, cash flow, budgets | All of it, plus board reporting |
| Fits a business that | Needs clean books | Needs decisions made on solid numbers | Has the scale to keep a finance team busy |
| Cost structure | Low, fixed | Mid, scaled to your need | Highest, salary plus overheads |
A bookkeeper tells you what you spent. Monthly management accounts and the advice that comes with them tell you whether you can afford to hire, buy stock or take on a loan, and what happens to cash if you do.
What management accounts and advisory cost in Malta
Monthly management accounts with advisory support are quoted individually, as a fixed monthly retainer, because the fee depends on how much of the finance function you hand over. There is no standard price, and I won't put one on a page before I know what the work involves. What I can say is the shape of the comparison: a full-time finance director adds salary, social security and bonus on top, whether or not there is enough work to fill the week (in Malta that post can cost between €70,000 and €95,000 a year). Outsourcing the same work costs a fraction of that.
The price moves with four things:
- Hours per month. A monthly review call is a different job from being embedded two days a week.
- State of the books. If I am cleaning up before I can forecast, the first months cost more. In most instances, I don't take on advisory work at all before the books are clean. The first months are typically scoped accordingly and may vary from one company to the next.
- Number of entities. A group with several companies and intercompany balances takes more time than one trading company.
- System and reporting needs. Setting up the accounting function properly, or building a monthly reporting pack, is extra work up front.
My own fees are set on a retainer basis, so the client knows exactly what he or she is expected to pay. Key Performance Indicators specific to the company, and to the industry it operates in, are set to monitor progress.
Six signs your business needs them
- You find out how the year went months after it ended. If the accounts reach you after the auditor does, you are steering by the rear-view mirror. This is very typical in Malta, and simply getting reliable management accounts every month can win you a real advantage over your Maltese and international competitors.
- Profit looks fine but the bank balance doesn't. That gap is almost always working capital: stock, debtors, VAT timing. A forecast shows it before it bites.
- You are about to borrow, raise money or sell. Banks and buyers want a clean set of numbers and a credible forecast. Building them under pressure shows. If you were to take a business loan with any of the major Maltese banks (Bank of Valletta [BOV], HSBC, APS, Lombard, etc.) you are certainly going to be asked to provide updated management accounts, cash flow forecasts and profitability forecasts.
- You are growing into new products, entities or countries. Intra-community VAT, intercompany balances and new revenue streams need someone to set the rules once.
- Your owner or manager is still doing the finance work. If you are the best salesperson or operator in the business, an evening spent on spreadsheets is the most expensive hour you have. In Malta, business owners tend to try and do it all. What they don't realise is that by dedicating time to finance-related tasks, they are simply giving up time that could be spent growing sales and improving operations.
- You don't trust the numbers. Different people give you different figures for the same month. That needs fixing at the source, not with another report.
What management accounts and advisory cover in Malta specifically
A generic article won't tell you what the work looks like here. This is what it usually includes for a Maltese company.
- Reporting framework. Deciding whether your accounts follow GAPSME or IFRS, and getting the treatment right on the items that cause trouble: inventory (IAS 2), depreciation (IAS 16) and revenue recognition (IFRS 15).
- CFR/MTCA compliance. Keeping the calendar with the Commissioner for Revenue under control: VAT returns, provisional tax, the annual tax return and payroll filings through the FSS.
- Cross-border VAT. If you sell to or buy from other EU countries, intra-community VAT has to be treated correctly from the first invoice, not fixed at year end.
- Group and shareholder structures. Maltese structures often involve several companies, shareholder loans and intercompany balances. These need clean records and a clear view of who owes whom.
- The auditor relationship. Handing the auditor a proper trial balance and supporting schedules shortens the audit and lowers its cost.
- Funding and banking. Preparing the numbers, the forecast and the explanation a bank or investor will ask for.
- Systems. Choosing and configuring the accounting system so the reports come out of it automatically. I work mostly with Xero, QuickBooks and Odoo.
If what you need first is clean monthly numbers rather than the advisory work on top, start with monthly bookkeeping and management accounts.
What it looks like in practice
Here is a recent engagement, with the client's details changed.
The problem. A Maltese company operating within the tourism industry, with a staff complement of about 35, came to me with books that were months behind. The owner couldn't say which products made money, and the auditor was waiting on a trial balance that didn't reconcile. The owner was also facing extensive pressure from one of the leading Maltese banks as he was falling behind on loan payments, despite the prior year audits showing a profit.
What I did.
- Cleaned up the ledgers and reconciled banks, debtors and creditors to the supporting records.
- Set up the accounting system on Xero so invoicing, stock and the ledger fed each other.
- Built a monthly management pack and a 12-month cash flow forecast.
- Built a data-oriented dashboard.
- Prepared the audit file and dealt with the auditor's queries.
The result. Through my engagement with this company, we increased profitability by 50% in the first year, both by growing revenue through investment in marketing and better use of assets, and by identifying the company's biggest sources of waste. We also closed the audits for two years, which allowed the owner to get much-needed financing from the banks. Working capital improved dramatically, and the owner now gets the numbers each month and makes decisions from them.
Frequently asked questions
How much do management accounts and advisory support cost in Malta?
It is quoted individually, as a fixed monthly retainer, because no two engagements are alike. The fee depends on the hours involved, the state of the books and the number of entities. It is usually a fraction of what a full-time finance director costs.
How is this different from standard annual accounting?
Annual accounting prepares and files: the statutory accounts, the tax returns, the VAT. Management accounts and advisory work use those same numbers every month, to plan, forecast and talk through decisions while they can still be changed. Most businesses need both.
When is a business too small for monthly management accounts?
If your books are current, your cash is predictable and you aren't borrowing or expanding, a good bookkeeper and an annual accountant may be enough. The need starts when decisions get bigger than the information you have.
Can you deal with the CFR/MTCA and the auditor?
Yes. Managing the compliance calendar and preparing the audit file are part of the engagement, and a Warranted Accountant can sign off on the work that needs it.
How long before I see a difference?
Usually within the first one to three months. The first month is spent understanding the business and fixing the numbers. After that you get a regular report and a forecast you can use.