Overview
Annual accounts are historical and often arrive too late for day-to-day decisions. Management accounts and cash flow forecasts can show current profitability, working capital, tax reserves, funding needs and the impact of planned hiring or investment.
Who this applies to
Growing businesses, owner-managed companies and organisations with seasonal or tight cash flow.
Key points
- Profit and cash are different.
- Forecast VAT, PAYE, Corporation Tax and loan payments separately.
- Compare actual results with budget and explain variances.
- Use consistent cut-off, accrual and stock information.
- Update the forecast when assumptions change.
Important dates and deadlines
There is no single statutory timetable, but monthly or quarterly reporting is most useful when completed promptly after the period end.
Practical checklist
- Reconcile bookkeeping.
- Confirm debtors, creditors and stock.
- Prepare profit and balance-sheet reports.
- Update a rolling cash forecast.
- Agree actions and owners.
- Review the next tax and filing dates.
Frequently asked questions
Can a profitable business run out of cash?
Yes. Slow customer payments, stock, tax and loan repayments can use cash even where profit is positive.
How often should forecasts be updated?
More often when cash is tight or assumptions are changing; otherwise monthly or quarterly can be appropriate.
How Accountants4All can help
Support matched to your circumstances
Accountants4All can prepare reporting packs, forecasts and VCFO-style reviews tailored to the decisions the owners need to make.
Official sources and further reading
This page is general guidance and does not create an adviser/client relationship. Tax rules and official guidance can change. Use the official sources above and obtain advice based on your circumstances.
Read the full tax disclaimer