Plain-English finance glossary

A short-range forecast of money in and out over the next thirteen weeks, used to spot a trough early.

Recognising income or costs in the period they relate to, even if the cash has not moved yet. Common at year-end for bills and invoices still open.

A list of what you owe suppliers, split by how overdue each bill is (for example current, 30, 60, 90-plus days).

A list of who owes you, split by how overdue each invoice is. The starting point for a chase queue.

A snapshot of what the business owns and owes on a given date: assets, liabilities and equity.

Matching the bank statement to the books for a period, so every difference is explained or queued for review.

Tax relief for qualifying business assets (for example vans and kit). Treatment is a tax decision: Alfred can organise the register, your accountant confirms the claim.

A forward look at money in and out. A 13-week grid is common for small firms because it shows the next trough, not only a monthly average.

How long your cash would last at the current burn rate if nothing else changed. Useful, but incomplete without a 13-week view of timing.

The annual filing that confirms company details with Companies House. It is not your accounts.

Tax on a UK company's taxable profits for an accounting period. The CT600 is the return that reports it to HMRC.

How many days, on average, you take to pay suppliers. Useful next to debtor days when you are reading cash timing.

The corporation tax return a UK limited company files with HMRC for an accounting period.

How many days, on average, customers take to pay you. Lower is usually healthier for cash.

Spreading the cost of a fixed asset over its useful life in the accounts. Drafts often land in Schedules for review before posting.

The running balance of money a director has taken from or put into the company, outside salary and dividends.

A distribution of company profits to shareholders. It is not a salary, and it needs enough distributable profits.

Long-term items the business owns and uses (vans, kit, fit-out), shown at cost less depreciation as net book value.

The main UK GAAP standard for many small and medium companies that are not filing as micro-entities under FRS 105.

The financial reporting standard often used for micro-entity accounts in the UK.

A tagged digital format used for many UK company accounts and tax computations filed online.

HMRC rules that require digital records and compatible software for certain tax returns, including VAT and (from 2026) Income Tax for many sole traders and landlords.

Internal P&L, balance sheet and cash views used to run the business during the year, not the statutory pack filed at year-end.

A company that meets size tests allowing simpler accounts under UK rules. Thresholds changed from April 2025.

Contributions paid by employees and employers on earnings. Employer NIC is a cash cost that should sit in a tax-aware cash forecast.

What a fixed asset is carried at in the books: cost less accumulated depreciation (and any impairment).

Pay As You Earn: how employers deduct Income Tax and National Insurance from wages and pay them to HMRC on a schedule.

A cost paid now that relates to a later period (for example annual insurance). Year-end often moves the unused part onto the balance sheet.

The statement of income and costs over a period, ending in profit or loss. Also called the income statement.

An amount set aside in the accounts for a likely future cost where timing or amount is uncertain. Needs professional judgement before it posts.

Checking that two records of the same money agree, for example bank balance versus books. Gaps land in a review queue.

How many individuals report Income Tax to HMRC (including many sole traders and landlords). Company corporation tax uses the CT600 instead.

A company within UK size thresholds that can use small-company accounts rules. Larger than a micro-entity, still lighter than full IFRS-style reporting.

A list of every account balance at a point in time. Accountants use it as a starting point for year-end and tax packs.

A scheme where some businesses account for VAT on money received and paid, rather than on invoice dates. Eligibility and fit are accountant decisions.

The turnover level at which most UK businesses must register for VAT. The figure changes over time: check current GOV.UK guidance.

The periodic return VAT-registered businesses send to HMRC, usually quarterly, summarising VAT due or reclaimable.

The short-term money tied up in the business: typically stock, debtors and cash, minus creditors. Timing matters as much as the total.

The statutory accounts a company prepares for an accounting period, filed with Companies House (and used for tax).