Why these seven kinds of finance support

What these seven are, and what they are not

We chose these seven to cover the jobs a finance function does, from keeping records to leading finance decisions. They are working assumptions. We built them from what the law requires, what professional bodies publish and what lenders ask for. They are not averages from a survey of businesses, and we have not tested them against what businesses actually have.

The rules are draft (version 0.1). Each version will be reviewed by a paid practising accountant before release, and the reviews will be listed on How our method works with the date and the version reviewed. No review has taken place yet.

A legal requirement applies whether or not you use an accountant. Published guidance and lenders' requirements describe good practice, not law. Our judgement is where we combine your answers into a suggestion, and it may change after review.

1. Bookkeeping and systems

What it is: keeping day-to-day records of money in and out up to date, on paper or in accounting software.

Basis: legal requirement. A limited company must keep accounting records, including "all money received and spent by the company", assets it owns, debts it owes or is owed, and stock. It must keep them "for 6 years from the end of the last company financial year they relate to", and GOV.UK says "You can be fined £3,000 by HMRC or disqualified as a company director if you do not keep accounting records."¹ A sole trader must keep records of business income and expenses for their Self Assessment tax return, for "at least 5 years after the 31 January submission deadline of the relevant tax year."²

The law sets what records must be kept. Whether you keep them yourself, with a bookkeeper or with an accountant is your choice, and our form does not assume you need to pay someone.

2. Accounts, tax and VAT

What it is: preparing and filing annual accounts and tax returns, and VAT returns if the business is registered.

Basis: legal requirement. For a private limited company, GOV.UK gives these deadlines: accounts to Companies House "9 months after your company's financial year ends", Corporation Tax payment "9 months and 1 day after your 'accounting period' for Corporation Tax ends", and the Company Tax Return "12 months after your accounting period for Corporation Tax ends".³

A business must register for VAT if its total taxable turnover for the last 12 months goes over £90,000, or if it expects its taxable turnover to go over £90,000 in the next 30 days. It can also choose to register below that level.⁴

Some companies must have their accounts audited. For financial years beginning on or after 6 April 2025, GOV.UK says a company "may qualify for an audit exemption if it has at least 2 of the following": an annual turnover of no more than £15 million, assets worth no more than £7.5 million, and 50 or fewer employees on average. Some companies must have an audit even if they are small, for example subsidiaries (unless they qualify for an exemption), and a company must have one if shareholders who own at least 10% of the shares ask for it. The full list is on GOV.UK.⁵

No law says you must use an accountant for this. The directors remain legally responsible for the company's records and filings, and a company that needs a statutory audit must appoint an eligible auditor (see Specialist support below).

3. Monthly management information

What it is: figures during the year, each month or each quarter, that show how the business is doing. These are known as management accounts.

Basis: published guidance, and some lenders' requirements. We have not found a legal requirement for a private company to produce management accounts. The ICAEW, in its guide for business owners, says "annual accounts are not enough to control a business" and "Most businesses need to produce quarterly operating statements and, better still, at monthly intervals."⁶ That is the ICAEW's view, not a legal rule.

Some lenders ask for management accounts. As one example, Allica Bank's business loans page asks, for loans up to £75,000, for "12 months of management accounts (less than 60 days old)", or instead "your full accounts from the last two years (less than six months old)".⁷ That is one lender. Other lenders set their own requirements, and we have not surveyed them.

Our judgement: when management information is worth having for your business. Our draft rules look at your turnover, your number of staff, whether a lender or investor is involved and whether the business is growing fast.

4. Planning and cash forecasting

What it is: a forecast of cash and profit for the months ahead, checked against what actually happens.

Basis: published guidance. The same ICAEW guide says "Cashflow forecasts can highlight when your business might run low on cash and can be the basis for an action plan to remedy the situation before it occurs", and that "businesses need to plan ahead and compare forecast figures with actual results."⁶ We have not found a legal requirement for a private business to keep a forecast.

Our judgement: when a forecast is worth having. Our draft rules look at your turnover, your number of staff, whether a lender or investor is involved, whether you may buy or sell a business and whether the business is growing fast.

5. Financial controls and approvals

What it is: clear rules for who approves payments, who signs off invoices and who checks the bank figures.

Basis: our judgement. We have not found a GOV.UK or professional body page that sets out what controls a small private business must have, so this kind rests on our judgement. Our reasoning: once more than one person can spend or receive the business's money, written rules on who approves what give a way to catch mistakes. The duty to keep accurate records (see Bookkeeping and systems) still applies.

Our draft rules look only at the number of people in the business. A paid practising accountant will review whether that is right.

6. Finance leadership

What it is: someone responsible for finance decisions, such as whether the business can afford new staff or equipment. This might be a part-time finance director, a financial controller or an owner with the time and skills to do it.

Basis: our judgement. We have not found a legal requirement for a private company to have a finance director. A finance director is one option. For some businesses, a management accountant or better monthly reporting from their current accountant may be enough, and our result says so where your answers point that way.

Accountants can also provide management accounts, forecasts and advice. Finance leadership is about who takes responsibility for finance decisions, not about whether your accountant looks ahead.

Our draft rules look at your turnover, your number of staff and whether you may buy or sell a business.

7. Specialist support

What it is: experience in one area, such as audit, online selling, selling abroad or a particular sector.

Basis: partly legal, otherwise our judgement. Where a company must have an audit, the Companies Act 2006 says an individual or firm is eligible for appointment as a statutory auditor if it "is a member of a recognised supervisory body, and is eligible for appointment under the rules of that body."⁸ Beyond audit, whether a business needs a specialist is our judgement. Our draft rules currently look at whether you sell goods online with stock or sales abroad, sell abroad, or run more than one company.

What the seven cannot tell you

The form only knows what you tell us. It cannot see how well your current support is done, whether it is on time or what you have agreed with your accountant. A kind of support that shows as not in place is something to discuss with your accountant, not a sign they are falling short. We do not give tax or accounting advice.