Autumn Financial Health Check – 7 things every business should review before year end

As we move into the final months of the year, October is a good opportunity for business owners to take stock of their finances. A simple financial health check now can highlight potential problems, identify opportunities and give you time to make informed decisions before the year ends.

Here are seven areas worth reviewing:

1. Check your cash flow

Profitability is important but cash flow keeps a business running. Review what is coming in and going out over the next few months and identify any periods where cash could become tight.

Look ahead to significant tax payments, supplier bills, payroll costs and other commitments so there are no unexpected surprises.

2. Review your corporation tax provision

If your company is making a profit, make sure you are putting enough aside for corporation tax. Your latest management accounts should provide an indication of your likely liability.

Setting money aside throughout the year can prevent a large tax bill from putting unnecessary pressure on cash flow later.

3. Check your VAT position

Review your VAT records and make sure transactions are being recorded correctly. If your turnover is approaching the VAT registration threshold it is particularly important to monitor it closely.

Businesses already registered for VAT should also check that appropriate VAT is being claimed on expenses and that sufficient cash is available for upcoming payments.

4. Review payroll costs

Salaries are only part of the cost of employing people. Consider national insurance, pension contributions, bonuses, benefits and any planned recruitment.

Understanding your true employment costs can help you make better decisions about hiring and remuneration.

5. Look at debtor days

A healthy sales figure means little if customers are taking too long to pay. Review outstanding invoices and identify overdue accounts.

Improving your invoicing and credit control processes can often provide a relatively quick improvement to business cash flow.

6. Review expenses and forecasts

Go through regular business expenses and question whether they are still providing value. Software subscriptions, insurance, professional services and other recurring costs can quietly increase over time.

Then compare your actual performance against your original forecasts. Are sales, margins and costs where you expected them to be? If not, update your forecast for the months ahead.

7. Consider future investment

Finally, think about what your business will need over the next 6–12 months. This could include equipment, technology, new employees, premises or marketing.

Planning investment in advance allows you to consider both the cash flow impact and any available tax reliefs before committing.

Start planning now

An autumn financial review doesn't need to involve dramatic changes. The aim is simply to understand where your business stands today and where it is heading.

Reviewing your figures now gives you time to address problems, take advantage of opportunities and enter the new year with a clearer financial plan. If you have any questions or queries do get in touch with your Swindells partner who will be able to advise you further.