Month 9 review

Why month nine, and not at your year end

Three months before your year end, finding something still means you can do something about it: a review at month nine leaves a full quarter to identify what needs attention and act on it.

After the year end, much of what turns up is already fixed. The trading is done, the profit is largely booked, and a good deal of what you find is a record of what happened rather than something you can still act on. That is why year-end accounts, however well prepared, are mostly a record.

At month nine there is still a quarter of trading left, and the review is aimed at that quarter: getting the bookkeeping into a state the accounts can be built from, dealing with anything that needs correcting while the records are recent, and knowing roughly what is coming so you can put money aside for it. Where something ought to be looked at by a tax adviser before the year closes, this is when you find out, rather than afterwards.

What the month 9 review actually looks at

It is a deliberate review rather than a report. We go through the books as they stand nine months in, with the year end specifically in mind: whether the bookkeeping is in a state the accounts can be built from, whether the control accounts agree to anything real, whether the balance sheet contains items that will need explaining, and what the profit and the likely tax position look like on current trajectory.

Errors found now are ordinary corrections. The same errors found in month fourteen are a clean-up standing between you and a filing deadline, and they are usually discovered at the worst possible time by the person least able to do anything about them.

An early view of the tax, while it is still useful

The most common reaction to a tax bill is not that it is unfair, it is that it is a surprise. Nine months in, we can give you a view of the likely position based on how the year has actually gone rather than on last year plus a guess.

It is an estimate and it depends on how the final quarter goes, and we will say which parts of it are firm and which are not. Knowing the approximate shape of it in month nine gives you something you do not have in month fourteen, which is time: time to set money aside, and time to take advice on anything that warrants it while the year is still open. An estimate is not a tax plan, and planning is not work this practice does. Where the figures raise something that should be discussed with a tax adviser, we will say so and refer you.

Who this is actually for

It suits businesses that do not want, or do not need, monthly management accounts but would rather not meet the year end blind. If your trading is steady and your records are in reasonable order, twelve monthly packs may be more than the business needs, and one deliberate look at the right moment gets you most of the value.

It also suits businesses that have had an unpleasant surprise before. Once somebody has had a tax bill they had not planned for, or a set of accounts that turned out to need three months of corrections first, the case for looking early makes itself.

If your year has been unusual, with a big purchase, a change in how you take money out, a new revenue line or a bad quarter, that is exactly when the check is worth most, because that is when last year is the least reliable guide.

What comes out of the review

A conversation, and a short list of things worth doing before the year ends. Sometimes that list is empty, and we will tell you so rather than manufacture work: a business with clean records and a predictable year genuinely may not need anything.

More often it contains one or two corrections to make now, anything worth raising with a tax adviser before the year end, and a number to put aside. Then, three months later, the year-end accounts are an assembly job rather than an investigation, which is how they are supposed to feel.