Management Accounts & Cash Flow
Knowing where the business stands, early enough to act on it.
Can you help improve my profitability?
Yes. We can review margins, pricing, overheads and performance trends to identify where profit may be improved.
Can you help me plan for buying equipment?
Yes. We can help you understand your financial position, prepare cash-flow forecasts and financial models, and prepare financial information for a lender. We can model purchase, lease and finance options side by side and show the effect on cash flow and profitability, and introduce you to a specialist adviser where appropriate, explaining our role and any referral arrangement first. Investment, pension product and other specialist recommendations should come from an adviser authorised for that work, and finance approval and outcomes cannot be guaranteed.
Can you help me plan for growth?
Yes. We can model the likely impact of new staff, equipment, premises, pricing changes and other growth decisions before you commit.
Can you help me prepare a business forecast?
Yes. We can prepare cash flow and profit forecasts to support planning, funding applications and decision-making.
Can you help me prepare for selling my business?
Yes. We can help improve financial information, identify issues, prepare forecasts and support the financial side of sale planning alongside your legal and corporate finance advisers.
Can you help me raise finance?
We can help you understand your financial position, prepare cash-flow forecasts and financial models, and prepare financial information for a lender. We can also assess how borrowing would affect cash flow, and introduce you to a specialist adviser where appropriate, explaining our role and any referral arrangement first. Investment, pension product and other specialist recommendations should come from an adviser authorised for that work, and finance approval and outcomes cannot be guaranteed.
Can you help me set business targets?
Yes. We can help translate your goals into realistic financial targets and measures that can be reviewed regularly.
Can you help with business budgeting?
Yes. We can prepare a practical budget and compare actual results against it throughout the year.
Can you prepare management accounts?
Yes. We prepare clear financial reports — traditional management accounts, giving you a regular snapshot of your business's financial performance, including your profit and loss, balance sheet and key financial information. However, we believe business owners need more than just historical reports. Through our Strategic Review & Insights service, we transform those figures into meaningful insights, helping you understand what's driving your business today and what actions you should take next. By combining regular reporting with cash flow forecasting, profitability analysis, strategic planning and practical advice, we help you use your numbers to make better business decisions—not just look back at what's already happened.
Can you produce a cash flow forecast?
Yes. We can build and update cash flow forecasts to help you anticipate pressure points, plan spending and make funding decisions.
Do I need to be on Xero?
It's not essential, but it helps. Because we work in the cloud with Xero, we can keep your forecast updated automatically from real transactions rather than relying on manual figures.
Do I need to be on Xero?
It isn't essential, but it makes a real difference. Because we work in the cloud with Xero, your reporting can be built from live transactions rather than figures typed up weeks later — so it's accurate and it's timely.
Do small businesses need management accounts?
A small business doesn't automatically need a formal monthly management pack. The better question is whether the owner is making decisions that would be improved by current financial information.
How can I check whether I’m too dependent on one customer?
Measure that customer’s share of revenue, contribution to profit and outstanding debts. Then model what would happen if they paid late, reduced orders or left. The risk is not captured by turnover alone: a smaller customer can still dominate your cash flow or capacity. CASS can help assess the exposure and plan practical steps to diversify income and strengthen reserves.
How can I improve cash flow in my business?
Invoice promptly, make payment terms clear, follow up overdue debts consistently and remove unnecessary friction from the way customers pay. A sale isn't useful cash until the money reaches the bank.
How can I stop using money set aside for VAT and tax?
Build expected tax payments into your cash-flow forecast and set aside an appropriate amount regularly, using a separate account if helpful. A fixed percentage of sales may be misleading because VAT recovery, profits and other factors affect what is due. Review the amount as your figures change. If you need the reserve to cover everyday bills, investigate the underlying cash shortfall rather than treating it as spare money.
How can I tell whether my prices cover my time and overheads?
Calculate the time and direct costs involved in delivering the work, then allow for overheads, non-billable time and your desired profit. Base the calculation on realistic billable hours rather than every hour you work. Review actual jobs against the estimate to spot overruns and unpaid extras. CASS can help you assess whether your pricing supports both the business and the income you need from it.
How can I track the profit and cash position of each job?
Give every job a consistent code and track its sales, direct costs, remaining work and cash movements against the original budget. Profit and cash need separate views: a job can earn a good margin while money is tied up in unfinished work, unpaid invoices or retentions.
How can management accounts help me make better business decisions?
Regular reporting makes trends visible before they become year-end surprises. Falling margin, rising payroll cost or slower customer payments can be investigated while the underlying issue is still manageable.
How do I calculate my break-even point?
Your break-even point is the sales level needed to cover your costs without making a profit or loss. For one product, divide fixed costs by the contribution per unit: selling price less variable cost. For a business with mixed sales, use an appropriate contribution margin and sales mix. Include a realistic cost for your own work. CASS can help turn the calculation into a useful sales target.
How do I know if my business can afford to recruit?
Salary is only part of the commitment. Include employer costs, pension, recruitment, equipment, software and any other costs associated with the role.
How do I know whether my business is growing profitably?
Revenue growth is only useful if the business keeps enough of it. Track gross margin and operating profit alongside sales so you can see whether growth is creating value or simply creating more work.
How do I know which products, services or clients make money?
Compare the income from each with the costs needed to deliver it, including staff time, materials, subcontractors and other directly attributable costs. Then consider how each contributes towards shared overheads. A busy client or popular product can still be unprofitable if delivery costs are high. CASS can help organise your records and reporting so you can make decisions using more than total turnover.
How do I stress-test a business decision before committing?
Model how the decision affects profit, cash and capacity under realistic alternatives. Change the assumptions that could genuinely vary, then agree what you would do if the weaker outcome occurs. A stress test helps expose risk and choices; it does not predict the future or guarantee an investment will succeed.
How does stock affect my profit?
Under accruals accounting, buying stock does not necessarily make the whole purchase an expense immediately. Unsold stock is normally held as an asset, with its cost recognised as the goods are sold. Missing stock counts, obsolete items or incorrect valuations can distort profit. Cash-basis treatment can differ. CASS can help check how stock is recorded and whether your reports reflect what is actually on hand.
How far ahead should I forecast cash flow?
A short-term weekly view is useful when cash is tight, while a rolling 12-month forecast is often more useful for planning tax, recruitment and investment.
How much cash should my business keep in reserve?
How much cash you should keep back depends on how predictable revenue is, how quickly customers pay, the fixed monthly cost base and how easily the business could reduce spending or access funding.
How much extra work do I need to sell to cover a discount?
It depends on your contribution margin and whether costs rise as sales increase. For example, a £100 sale with £60 of variable costs contributes £40. A 10% price discount reduces that contribution to £30, so you need about 33% more sales volume to generate the same total contribution, assuming costs and capacity stay unchanged. Check this before discounting: extra turnover does not necessarily mean extra profit.
How often should I look at my management accounts?
Monthly for most businesses, and within a few weeks of the month ending — late figures are history, not management information. Quarterly can be enough if the business is stable and predictable, but if cash is tight or growing quickly, monthly is the minimum.
How often should I update my cash flow forecast?
Monthly updates are a sensible minimum for many businesses, while businesses with tight cash or rapid change may need a weekly rolling forecast.
How often will we review the forecast?
As often as it's useful for you — many clients find a monthly or quarterly review keeps them firmly in control of cash and growth plans, with the forecast kept live in between.
How often would I get them?
Monthly works best for most businesses, because it keeps you close to what's happening. Quarterly can be right if your business is steadier or seasonal. We'll recommend what genuinely suits how you trade rather than selling you the biggest package.
How should I record a grant received by my business?
Keep the award letter, conditions, payment details and evidence of how the money is used. The accounting treatment depends on the purpose, conditions and accounting framework, not simply when cash arrives. A grant may relate to running costs or an asset, and repayment conditions can matter. Tax treatment is a separate question: grants are not automatically tax free. Your accountant can assess the records and agree how the grant should be reported.
How should annual subscriptions paid upfront by customers be accounted for?
Receiving a year’s subscription upfront does not always mean the whole amount is income earned immediately. Under accrual accounting, recognition follows the service promised and delivered. VAT timing can differ, and cash-basis rules may give another result. Keep the contract, billing period and accounting basis clear.
How should damaged, obsolete or missing stock be recorded?
Check the quantity, condition and recoverable value, then record a supported adjustment under the accounting basis used. Stock should not stay at its original value simply because it was expensive to buy. Missing items also need investigation rather than an unexplained write-off.
How should transactions between companies I own be recorded?
Each company needs its own record of money, goods and services exchanged with the other. Common ownership does not turn the companies into one bank account. Identify whether each transaction is a loan, payment on behalf of another company, recharge or sale, then check the accounting and tax treatment.
How should unfinished work be reflected in my accounts?
Unfinished work may need recognition in your accounts even if the customer has not been invoiced. The treatment depends on the contract, work completed and accounting basis. Invoice dates alone do not always show when income or costs belong in the results.
Is cash flow forecasting only for businesses in trouble?
Not at all. It's just as valuable for healthy, growing businesses — it's how you plan investment, hiring and tax with confidence rather than crossing your fingers.
Is this the same as your Outsourced Finance service?
No. Strategic Review & Insights is the reporting and interpretation layer: management accounts, the numbers explained, and regular conversations about what to do next. Outsourced Finance & Virtual FD is the whole finance function — bookkeeping, payroll, VAT, reporting and FD-level support together. Strategic Review & Insights is available alongside our ongoing monthly bookkeeping, because it depends on current records; our pricing tool explains where that requirement applies.
My bookkeeping is behind. Can you still do this?
Yes — we'd start by getting the bookkeeping accurate and up to date, because reporting is only ever as reliable as the records behind it. We take over from an existing bookkeeper or accountant regularly, including part-way through a year, and we'll tell you honestly what needs putting right first.
What KPIs should I track in my business?
The KPIs worth tracking depend on the business. Choose a small number that explain revenue, margin, cash or capacity — for example debtor days, utilisation, recurring revenue, average order value or labour cost.
What are accruals and prepayments?
An accrual records a cost relating to a period even though the bill or payment may come later. A prepayment spreads a cost paid in advance over the periods it relates to, such as annual insurance. They help reports reflect when costs are incurred rather than just when cash moves. The approach depends on the accounting basis used; tax treatment may differ.
What are management accounts?
Management accounts are regular financial reports prepared to help you run the business. They normally bring together profit and loss, balance sheet and other relevant information so you can see what has happened recently and what needs attention.
What does a balance sheet tell me?
A balance sheet shows the business's assets, liabilities and equity at a point in time. It includes items such as cash, customer debts, supplier balances, loans and tax liabilities.
What financial checks should I make before buying another business?
Review historic and current results, cash flow, debts, tax obligations, working capital and the quality of the records. Test whether reported profits are sustainable and identify dependence on key customers, staff or the owner. Consider the purchase structure, funding and costs after completion. CASS can discuss financial analysis and due-diligence support within our scope; legal, valuation and specialist tax work may require other advisers.
What financial reports should a growing business review every month?
Review revenue, direct costs, gross profit and overheads so you can see whether sales are translating into profit. Compare the month and year-to-date position with budget, forecast or a useful prior period.
What is Business Growth and Planning?
It is our service for business owners who want to look forward, understand performance and use their financial information to make better decisions.
What is a 13-week cash-flow forecast, and when would I use one?
It is a week-by-week forecast of money expected in and out over the next 13 weeks. It helps you see when cash could become tight, even if the business looks profitable overall. It is particularly useful during rapid growth, seasonal trading or financial pressure. Start with the available bank balance, include realistic payment dates and update it regularly against actual results.
What is a cash flow forecast?
A cash flow forecast estimates the money expected to come into and leave the business over a future period. It's designed to show when cash may become tight or when there may be capacity to invest.
What is a profit and loss report?
A profit and loss report summarises income and expenses for a month, quarter or year and shows the resulting profit or loss.
What is the difference between buying equipment outright, hire purchase and leasing?
Buying outright usually means paying for ownership immediately. Hire purchase spreads payments, with ownership normally passing when the agreement’s conditions are met. Leasing gives you use of the equipment under a rental arrangement, with ownership depending on its terms. Cash flow, interest, VAT, tax relief and accounting treatment differ; a lease is not automatically just a monthly expense in the accounts. CASS can compare the financial implications before you commit.
What is the difference between buying equipment outright, hire purchase and leasing?
Buying outright usually means paying for ownership immediately. Hire purchase spreads payments, with ownership normally passing when the agreement’s conditions are met. Leasing gives you use of the equipment under a rental arrangement, with ownership depending on its terms. Cash flow, interest, VAT, tax relief and accounting treatment differ; a lease is not automatically just a monthly expense in the accounts. CASS can compare the financial implications before you commit.
What is the difference between margin and markup?
Markup compares profit with cost; margin compares profit with the selling price. If something costs £80 and sells for £100, the £20 difference is a 25% markup but a 20% margin, before other costs. Use amounts excluding recoverable VAT for a like-for-like comparison. Confusing the two can lead to prices that earn less than expected. CASS can help you build the right calculation into your pricing.
What is working capital?
Debtors, creditors and working capital broadly reflects short-term assets and liabilities such as customer debts, stock and supplier balances. It helps explain why a profitable business can still need cash to fund growth.
What key performance indicators should I track?
The right measures depend on your business. They may include gross margin, cash runway, debtor days, recurring income, utilisation or profit by service or product.
What numbers should a business owner understand?
At minimum, understand revenue, gross profit, overheads, net profit and cash. Those five numbers tell you whether sales are turning into margin, whether the cost base is under control and whether the profit is actually turning into money in the bank.
What should I budget for when growing my business?
Recruitment, marketing, systems, premises, stock and professional support can all increase before the additional sales are collected. Include the timing of those costs, not just the annual total.
What should I check before paying a supplier who has changed their bank details?
Pause and verify the change independently using a trusted contact number already on file, not a number supplied in the change request. Follow your approval process and use your bank’s payee checks, but do not treat a matching name as the only safeguard. Unexpected urgency is a warning sign. If you have already made a suspicious payment, contact your bank immediately.
What should I check before signing a long-term lease or other fixed commitment?
Look at the full commitment, not just the monthly payment. Check upfront costs, price increases, exit terms and any personal guarantee, then test affordability under a weaker trading forecast. A commitment should leave room for tax, wages and working capital as well as the expected benefit.
What should I do if I think I’ve paid a fraudulent invoice?
Contact your bank immediately using a trusted number and explain that the payment may be fraudulent. Ask about stopping or recovering it. Preserve the evidence and report the incident through the appropriate official route. Recovery is not guaranteed, so speed matters.
What should I do when a large customer keeps paying late?
Check the contract, invoice accuracy and whether there is a genuine dispute. Contact the customer early, agree clear payment dates and keep records of the conversation. Review credit limits, deposits and future payment terms, and reflect realistic collection dates in your forecast. CASS can help with debtor reporting and agreed credit-control support. Formal recovery or contractual disputes may require legal advice.
What should I expect from a quarterly finance review?
Start with the financial and operational results since the last review: revenue, margin, costs, cash and the KPIs that matter to the business. Focus on material movement rather than reading every line of a report.
What should I keep track of every month in my business?
Review sales, gross profit, overheads, net profit and cash every month. Those figures tell you whether the business is growing, whether it is keeping enough of what it earns and whether the profit is turning into cash.
What should management accounts include?
I would normally expect to see a profit and loss account and balance sheet, with cash information alongside them. Depending on the business, it may also include aged debtors and creditors, cash forecasts and selected KPIs.
What's the difference between management accounts and year-end accounts?
Year-end accounts are a statutory record of a year that has already finished — they satisfy Companies House and HMRC. Management accounts are for you, produced monthly or quarterly while you can still act on them. One is compliance looking backwards; the other is information you can make decisions with.
What's the difference between profit and cash flow?
Profit is the income earned less the costs associated with earning it over a period. It tells you whether the business model is generating a return, but it doesn't tell you exactly when money moves through the bank.
When does a business need strategic financial advice?
Strategic advice becomes valuable when choices about people, pricing, funding or investment can materially change profit or cash. At that point instinct alone becomes an expensive way to make decisions.
Why can my business be profitable but have no cash?
You may have recorded sales that customers have not yet paid, bought stock, repaid loans or paid for equipment. Those cash movements do not necessarily match the profit recognised in the same period.
Why do foreign-exchange gains and losses appear in my accounts?
When a transaction is in another currency, its value in your reporting currency can change between invoicing, payment and the reporting date. That movement can create an exchange gain or loss. It is separate from the original selling price, bank fees and the business’s underlying trading margin.
Why does my business need a cash flow forecast?
Cash problems are much easier to solve when you can see them several weeks or months ahead. A forecast creates time to chase debt, delay spending, change payment terms or arrange funding before the bank balance becomes the emergency.
Why does my profit change after my accountant makes adjustments?
Your bookkeeping may not yet include every item needed for the period. Adjustments can account for unpaid bills, prepaid costs, stock, depreciation or transactions recorded incorrectly. They help put income and costs into the right period and classification. Ask for an explanation of material changes so you understand the final result. CASS can talk you through the adjustments rather than leaving you with a different number and no explanation.
Why doesn’t my bank balance match the profit in my accounts?
Profit measures income less expenses under the accounting basis used; the bank balance measures cash held. Unpaid customer invoices, unpaid bills, loan repayments, equipment purchases, tax payments and money taken by the owner can make them different. A profit report alone does not show what you can afford to spend. Look at the balance sheet and cash flow alongside it.
Why is buying equipment treated differently from an everyday expense?
Equipment used over several periods may be recorded as an asset rather than charged entirely as an expense straight away. Its cost is then recognised through depreciation in the accounts. Tax relief follows separate rules and may be available at a different time. Treatment also depends on the accounting basis and the item. CASS can explain both the effect on your accounts and the cash cost.
Why isn’t the whole loan repayment an expense?
A loan repayment usually contains capital and interest. The capital reduces the amount you owe on the balance sheet rather than creating a new expense: the original purchase or use of the funds is accounted for separately. Interest and fees have their own accounting and tax treatment. The whole payment still affects cash flow, which is why profit and cash available can move differently. CASS can explain the split in your reports.
Why shouldn't I wait until year end to look at my accounts?
Year-end accounts tell you what happened in a period that has already finished. If margin fell six months ago or costs started drifting upwards, finding out after the year end doesn't give you those six months back.
Will you explain the reports or just send them over?
We'll go through them with you. A report you don't understand is no use to anybody, so your client manager will talk you through what's changed, what's working and what needs attention — in plain English, without the jargon.