Reconcile profit to cash
Explain the movement from accounting profit to bank cash through debtors, stock, creditors, tax, capital purchases and loan repayments. This prevents extraction decisions being made from the wrong number.
Practical guide · Business owners
Twelve checks every owner-managed business should make before year end.
Use this checklist to turn year-end from a filing exercise into a controlled review of cash, tax, remuneration, records and the decisions that affect future value.
- FCCA & CTA expertise
- Experience at BDO & KPMG
- Responses in hours, not days
- Fees agreed upfront
How to use it
Work from the figures to the decisions.
Assign each check an owner, evidence source and completion date. Mark an item complete only when the figure reconciles or the decision is documented, not because someone intends to look at it later.
Items involving transactions, shares, pensions or legal documents may need specialist advice. Use the checklist to surface them early enough for that work to be properly scoped and implemented.
The 12-point review
A stronger close to the company year.
Each check produces either reconciled evidence, a documented decision or a named action with a deadline.
Forecast every tax payment
List corporation tax, VAT, PAYE and directors’ personal tax with dates and distinguish liabilities already earned from payments on account or estimates.
Confirm distributable reserves
Before dividends, use up-to-date accounts to establish available reserves and document the board decision, shareholder entitlement and payment.
Review director’s loan accounts
Reconcile personal and company spending, repayments, interest and proposed remuneration before year end, then identify any company charge or benefit reporting.
Test salary, dividend and pension options
Model company deduction, PAYE and NIC, personal income, annual allowance, cash access and the business’s investment needs rather than using a generic formula.
Capture capital expenditure
Identify plant, equipment, vehicles, software and property works separately, then consider capital allowances, financing and the date expenditure is incurred.
Clean up VAT treatment
Review unusual, high-value and cross-border transactions, business entertainment, mixed-use costs, deposits and bad debts before the return becomes a repeated error.
Check payroll and benefits
Reconcile payroll to the ledger, director pay, reimbursed expenses and taxable benefits, with reporting and payment dates assigned to a named person.
Verify the share record
Reconcile Companies House, statutory registers, articles, option records and the cap table. Address missing allotments, transfers, valuations or ERS filings early.
Review contracts and employment status
Check material contractor, consultant and off-payroll arrangements against actual working practices, not merely the label used on an invoice.
Protect relief conditions
If a sale or succession is possible, test trading status, shareholder eligibility, investment activity and qualifying periods before a deal timetable begins.
Set next year’s reporting rhythm
Agree who maintains records, which management information is needed monthly or quarterly and when advisers will review tax before decisions become irreversible.
Year-end health check
Ask UA Tax to turn the checklist into an action plan.
Tell us the company year end, bookkeeping platform, current adviser arrangements and the main decision you expect in the next 12 months.
Helpful detail
Frequently asked questions
When should the checklist be completed?
Start several weeks before the company year end, then revisit the cash and remuneration points before 5 April where the owner’s personal tax year creates a separate deadline.
Does completing the checklist replace tax advice?
No. It helps identify questions and missing evidence. The correct treatment depends on the company, owners, transactions and current rules.
Which figures should management accounts include?
At minimum, reconcile profit, balance sheet, cash, debtors, creditors, tax, loans and director balances. Add operational measures only where they influence real decisions.
What if the company cannot pay upcoming tax?
Forecast the shortfall early and seek advice. Filing and payment are separate obligations, and proactive contact with HMRC is generally more constructive than allowing deadlines to pass silently.
Should the checklist be shared with other advisers?
Yes where relevant. Solicitors, lenders, payroll teams and financial advisers may hold evidence or need to implement a step, with responsibilities and confidentiality handled clearly.
Can UA Tax perform the review for us?
Yes. We can turn the checklist into a scoped year-end health check, reconcile the figures and provide a prioritised action plan.
Resolve the issues that should not roll into another year.
UA Tax can turn the checklist into a reconciled review and prioritised action plan for the company and its owners.