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GLOSSARYTERMS AS A CREDIT DESK USES THEM

Management accounts

What are management accounts, and why does a bank want them?

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BY MICHAEL SHANG · SIXTEEN YEARS IN COMMERCIAL BANKING · UPDATED

// THE SHORT ANSWER

Management accounts are a business's own monthly or quarterly profit and loss, balance sheet and cash position, prepared for the people running it rather than for statutory filing, and unaudited. A bank asks for them because annual accounts arrive months after the year they describe, and the desk reads the movement between packs — margin, debtor days, the facility's shape — more than any single set. When they arrive, and whether they agree with the year-end accounts, is read as closely as what they say.

BASIS  Practitioner judgment from sixteen years in commercial banking, set out in How Bankers Think (Highbank Press, 2026). Every borrower on this site is a composite constructed for teaching, not a client. The market is mid-market commercial lending as practised in New Zealand and Australia; where a convention differs elsewhere, the page says so.

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