Year-end cash checklist for UK small businesses: 12 checks before your financial year closes

Year end is usually treated as an accounting deadline: something your accountant needs you to tidy up. It's more useful as a cash deadline, the one point in the year where you stop, count everything and decide what the next twelve months need.

This checklist is written for UK limited companies, partnerships and sole traders. Not every item will apply to you, but working through it a month before year end usually turns up at least one decision worth making while there's still time.

Key takeaways: start your year-end review about a month before the date, not after it; your accounts filing and tax payment deadlines follow your year end on a fixed timetable, so map them now; old debts, slow stock and unused subscriptions are the easiest cash to recover; a 13-week forecast is the single most useful document to finish the year with.

When should I start my year-end cash review?

Start about four to six weeks before your financial year end, so you still have time to collect, cut or rearrange things before the books close.

Your financial year end, sometimes called the accounting reference date for a limited company, is set at Companies House and doesn't have to be 31 March or 31 December. You can check it on the Companies House register. For sole traders and partnerships, the tax year runs from 6 April to 5 April, and most now report on that basis.

Working early matters because many of the useful actions take weeks: a customer who owes you money won't pay the day you ask, a supplier won't change terms overnight and a finance application needs recent bank statements.

What is on a year-end cash checklist?

Twelve checks cover the essentials: reconcile, collect, count, map deadlines, review costs and finance, and forecast.

1. Reconcile every bank, credit card and payment-provider account (such as card terminals and online payment platforms) to the penny.
2. List every unpaid invoice over 60 days old and decide, invoice by invoice: chase, settle or write off.
3. Count stock and flag anything that hasn't moved in six months.
4. Map every tax payment due in the next 12 months: VAT, PAYE and National Insurance, Corporation Tax and any Self Assessment payments on account.
5. Note your Companies House filing deadlines: annual accounts and the confirmation statement.
6. Review supplier terms and ask whether any can be extended without damaging the relationship.
7. List every finance agreement you hold, with its balance, rate, monthly repayment and end date.
8. Cancel subscriptions and services nobody has used in the last quarter.
9. Check director's loan account balances with your accountant, because overdrawn balances can have tax consequences.
10. Check your business credit file for errors, old addresses or filings you don't recognise.
11. Build or refresh a 13-week cash-flow forecast.
12. Decide now what you'll do if the forecast shows a gap.

The rest of this post explains the checks that most often change a business's cash position.

How do I chase old debts before year end?

Sort unpaid invoices by age, contact every customer over 30 days late with a specific request and a date, and decide which debts are realistically lost.

An aged debtor report, a list of who owes you money grouped by how long it's been outstanding, is available in almost all accounting software. Work from the oldest down. A phone call with a clear question ('Can you confirm this will be paid by Friday?') tends to work better than another reminder email.

For business-to-business debts, the Late Payment of Commercial Debts legislation allows you to claim statutory interest and fixed compensation on late invoices. Using it can strain a relationship, so many businesses mention it rather than enforce it. GOV.UK explains how it works and what you can claim. Our post on late payments for UK SMEs goes further.

Debts you're confident won't be paid may be written off as bad debts. Talk to your accountant, because writing off correctly affects your profit figure and, if you're VAT-registered, you may be able to reclaim VAT you've already paid on an unpaid invoice under HMRC's bad debt relief rules, subject to conditions.

Which tax and filing deadlines follow my year end?

For most private limited companies, accounts are due at Companies House nine months after year end, Corporation Tax is payable nine months and a day after year end, and the Company Tax Return is due twelve months after.

These are the standard timetables. First accounts, large companies paying Corporation Tax by instalments and businesses that change their year end follow different rules, so check your own deadlines on GOV.UK and in your Companies House and HMRC accounts.

The Corporation Tax payment is the one that most often surprises growing companies, because it's based on a profitable year that's already finished, while the cash may have been reinvested since. If you've had a strong year, set aside an estimate now. Your accountant can give you a figure once the accounts are drafted. For VAT timing specifically, see cash-flow gaps and VAT quarters.

What should I check about the finance I already have?

List every agreement with its outstanding balance, monthly repayment, rate and end date, then check that the total repayment load still fits your forecast.

It's common to find a loan that's nearly finished (freeing up cash soon), a facility you're paying for but not using, or two agreements that together take more each month than you realised. A simple table like this helps:

Also check whether any agreement includes a personal guarantee, a promise by a director to repay if the business can't. Knowing where you stand on guarantees matters before you take on anything new. Our guide to personal guarantees explains how they work.

A useful single number here is the debt service coverage ratio (DSCR), which compares the cash your business generates with the repayments it has to make. Lenders use it to size facilities. You can work yours out with the DSCR calculator.

How do I build a 13-week cash-flow forecast?

Start from today's bank balance, add expected receipts and subtract expected payments week by week for 13 weeks, then look for the lowest point.

Thirteen weeks is a quarter: long enough to catch a VAT payment, a PAYE month and most seasonal swings, short enough to be reasonably accurate. A spreadsheet is fine.

• Receipts: customer payments on the dates you realistically expect them, not the due dates on the invoice.
• Fixed payments: rent, wages, loan repayments, insurance, software.
• Variable payments: stock, materials, subcontractors, fuel.
• Tax: VAT, PAYE and National Insurance, Corporation Tax, on their actual due dates.
• One-offs: equipment, annual renewals, bonuses, planned hires.

Here's an illustrative example of what a forecast can reveal. A company starts week 1 with £45,000 in the bank. Receipts average £30,000 a week, outgoings £27,000. It looks comfortable. But in week 6 a VAT payment of £22,000 lands the same week as monthly wages of £35,000, and in week 10 a Corporation Tax bill of £28,000 falls due. In this illustrative case the running balance dips to around £6,000 in week 10, far closer to zero than the average weekly figures suggested.

That's the value of a forecast. It doesn't change the numbers, but it tells you which week to worry about, while there's still time to do something about it.

What should I do if my forecast shows a cash gap?

Decide on your response now: collect faster, delay or spread a cost, talk to HMRC early, or arrange a facility before you need it.

In rough order of cost, the options usually look like this:

1. Bring cash in sooner: chase overdue debts, invoice on time, ask for deposits on large orders.
2. Push cash out later, fairly: agree longer terms with suppliers you have a good relationship with.
3. Trim costs that don't earn their keep: subscriptions, unused space, underused vehicles.
4. If a tax bill is the issue, speak to HMRC about Time to Pay before the deadline, not after.
5. Arrange finance matched to the gap: a revolving credit facility for short, repeating gaps, or a business loan for a one-off need with a clear repayment plan.

A facility arranged before you need it is almost always less stressful, and often cheaper, than one arranged in a hurry. Lenders look at recent bank statements, so applying from a steady position helps.

Does year end affect my ability to get business finance?

It can, because lenders look at your latest accounts, your recent bank statements and whether your filings and tax are up to date.

Late accounts at Companies House are visible to anyone and can count against an application. Overdue HMRC payments may come up in a lender's questions. On the other hand, a clean set of filed accounts showing a profitable year is one of the strongest documents you can bring. If you're thinking about finance in the coming year, it's worth reading what lenders see in your bank statements and building business credit in the UK alongside this checklist.

How Rook Bristol can help

Rook Bristol provides business loans, revolving credit, revenue-based finance, asset finance and invoice finance to UK-registered businesses, from £10,000 to £1 million over terms of up to 60 months. Businesses typically need at least 6 months of trading and £10K or more in monthly turnover to apply.

If your year-end review shows a gap in the months ahead, you can get a rough idea of what might be available with the funding estimator, or start an application. All finance is subject to status. We can't advise on your tax or accounts, so do involve your accountant in year-end decisions.