Developing a management accounting system means setting the rules by which a company collects and analyses data on revenue, costs, profit and cash for the owner's decisions. Key Solutions designs responsibility centres, reports and master data, configures your accounting system and runs the first reporting cycle with you.
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In short
- When you need it: the owner cannot see profit by business line, departments report different figures, or the company is preparing for an investor or a loan.
- What you get: a management accounting policy, a set of management reports, master data, a configured accounting system and instructions for your team.
- Timing: in our experience, the methodology takes 4–8 weeks, and launch plus the first two or three monthly cycles take another 2–3 months.
- Fee: agreed individually, based on the number of business lines, legal entities and responsibility centres and the state of your books.
- How to start: tell us which decisions you want to base on figures and which system you use for accounting now.
Management accounting versus financial accounting in Ukraine
Ukrainian law defines management (internal) accounting as a system for collecting, processing and preparing information about a company for internal users in the management process (Art. 1 of Law No. 996-XIV). It is built around the information needs of a particular company, while tax and financial accounting must follow the law and national standards.
| Feature | Financial accounting | Management accounting |
|---|---|---|
| Users | Tax authority, banks, shareholders | Owner, CEO, heads of departments |
| Rules | Law No. 996-XIV, national GAAP or IFRS | A policy approved by the company |
| Segments | Chart of accounts and sub-accounts | Business lines, projects, clients, cost centres |
| Frequency | Interim and annual statements | Weekly, monthly or quarterly, as decisions require |
Companies design their own system and forms of management accounting, reporting and control (Part 5 of Art. 8 of Law No. 996-XIV).
When a company needs a management accounting system
- different departments use the same data and adjust it for their own needs, so sales, warehouse and finance reports disagree;
- the financial statements show a profit while cash keeps running short;
- the group has several business lines or legal entities, and the owner cannot see which one earns money;
- the company is preparing for an investor, a bank loan or the sale of a stake.
Budgets and variance analysis are linked with financial planning and budgeting, long-term goals with a financial business model.
What the service includes
- diagnostics: interviews with the owner and managers, review of current accounting, reports and document flow;
- financial structure: profit, cost and investment responsibility centres;
- management report set and formats, with a definition of every indicator;
- master data and costing methods: revenue and cost items, business lines, projects;
- sub-accounts and analytical dimensions in your accounting system;
- a management accounting policy and staff instructions;
- implementation and change control during the first reporting cycle.
How we work
- Diagnostics and goals. We agree which decisions the owner will base on figures and check where the data comes from today.
- Structure and reports. We define responsibility centres, report formats, frequency and owners.
- Methods and master data. We prepare classifiers, cost allocation rules, a costing method and the policy.
- System configuration. We add analytics and sub-accounts to your accounting system or build report templates.
- First reporting cycle. Together with your team we close the first period, reconcile reports with the books and fix gaps.
Timing
In our experience, the methodology for a company with one or two business lines takes 4–8 weeks, and launch plus the first two or three monthly cycles take another 2–3 months. Timing depends on the number of entities and the state of your books.
What affects the fee
- number of business lines, legal entities and responsibility centres;
- number and complexity of reports;
- state of current accounting and the amount of system configuration.
What we need from you
- the owner or CEO in 2–3 working sessions;
- read access to the accounting system or data exports;
- existing reports, budgets and the organisational chart;
- a finance or accounting contact for sign-offs.
Deliverables
- a management accounting policy with responsibility centres;
- report templates with indicator definitions;
- master data aligned with the accounting records and a configured system;
- the first set of reports based on your actual data.
Legal basis
Legal basis for the work
- Art. 1 of Law No. 996-XIV: definition of internal (management) accounting;
- Parts 2 and 5 of Art. 8 of Law No. 996-XIV: the owner organises accounting; the company designs its own management accounting and additional accounts;
- Chart of Accounts, Ministry of Finance Order No. 291: companies introduce sub-accounts based on management, control and reporting needs;
- Paras 11 and 16 of National Standard 16 "Expenses": production cost and allocation of production overheads.
Risks and why to hand the set-up to a contracted team
Reporting that lives in one person's spreadsheet stops when that person leaves, and master data that differs from the books makes the owner's reports impossible to reconcile with the statements a bank sees. We build the system on accounting data and fix scope, timing and confidentiality in the contract.
Why Key Solutions
- Turnkey, with no extra hassle
- We take the whole task: documents, calculations, reporting and correspondence with the State Tax Service. You make the decisions, provide source documents and sign; we do the rest and contact you only when it matters.
- We take on the tax office
- Information requests, blocked tax invoices, inspection reports: we prepare explanations, rework documents and appeal until the issue is closed. Where the law is in dispute, we work together with the group's lawyers.
- We see it through
- Your case stays on track: the specialist running it remains with you, even if an inspection or audit drags on for months. Statutory audits are performed, and the report signed, by a partner audit firm entitled to perform them; we handle preparation and support through publication, so you deal with one team from start to finish.
- Boutique-level involvement
- A senior specialist runs your project personally (see the Our employees page), backed by 14 years of Innova group practice in 50+ countries. Non-standard tasks are our field: where you hear “it can’t be done”, we look for a lawful way, and group companies cover the rest: legal.ua for legal matters, crystal.tax for crypto-asset taxation.
- Your affairs stay yours
- Information about your company, turnover, payroll and counterparties reaches neither competitors nor third parties. We disclose only what the law or a procedure requires, and the contract says so.
- Faster and right the first time
- Full involvement: your specialist learns your books, contracts and business, so documents and reports are ready on time with no rework. The group's 14 years of experience let us get right the first time what takes some firms three attempts.
Frequently asked questions
How does management accounting differ from financial accounting?
Financial accounting follows the law and national standards and serves external users: the tax authority, banks and shareholders. Management accounting follows rules the company sets for its own managers, including the reporting segments, frequency and format. Both use the same source documents, so we reconcile them with each other.
Is management accounting mandatory for a Ukrainian LLC?
Law No. 996-XIV sets no duty to keep management accounts. Part 5 of Art. 8 of the Law lets a company design its own system and forms of internal (management) accounting, reporting and control of business transactions. The owner therefore decides which reports are needed.
How long does it take to set up management accounting?
In our experience, designing the methodology for a company with one or two business lines takes 4–8 weeks. Launch and the first two or three monthly reporting cycles take another 2–3 months. Timing depends on the number of legal entities, the state of the books and how quickly decisions are made.
How much does a management accounting system cost?
The fee is agreed individually. It depends on the number of business lines and legal entities, responsibility centres, the state of current accounting, the amount of system configuration and whether you need support for the first reporting cycles. We quote after a short diagnostic and fix the fee in the contract.
Which software should we use for management accounting?
We choose the tool based on transaction volume and the system already used for bookkeeping. Often extra analytics in the BAS accounting system or a separate database fed by exports is enough; a small business may use spreadsheets built on shared master data that matches the books.
Who is responsible for management accounting in a company?
Organising accounting is the owner's responsibility (Part 2 of Art. 8 of Law No. 996-XIV). Usually the owner approves the management accounting policy, the CFO or chief accountant owns the reports and heads of departments answer for the data of their responsibility centres. We set this out in the policy.
Related services
Let's discuss management accounting for your company
Tell us how many business lines and legal entities you have, which reports exist and which decisions you want to base on figures. We will reply with the scope, timing and fee.
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