• Make sure you have depreciated your fixed assets, equipment and vehicles, at a realistic rate. You don’t want the written down value of your assets to exceed their market value.
  • Write off any bad debts.
  • Write off any slow moving or obsolete stock. Consider an on-site auction or similar to get rid of it.
  • Make sure that you have not capitalised any replacement equipment that should have been written as repairs or written off equipment purchases that should have been capitalised.
  • Take a good look at your cut-off procedures. Are all your supplier invoices received and posted? Have you invoiced customers for work you have not delivered yet?


  • Base your sales projections on known factors: orders received, consistent with past or repeat sales.
  • Base you cost projections on current fixed costs, rents, wages and salary costs, and additional costs that you feel need to be included. Be realistic.
  • Factor in expenditure on capital equipment that you feel must be acquired to maintain sales or production at the required levels.
  • Make sure that apart from creating profit and loss and balance sheet forecasts, you also prepare a detailed cash flow forecast.


  • Show an overall improvement or worsening of your financial position.
  • Reveal a healthy cash flow.
  • Point to deteriorating market conditions, falling demand for your products or services. How will this affect your planning for the immediate future and your longer-term goals?
  • Point to improving market conditions, rising demand for your services. Are you in danger of over-trading?
  • How will your business investors, your bankers, react to the projected results?
  • Is your business providing you with an adequate return for your capital invested in the business and are you properly remunerated for the time you spend in the business?


Based on the answers to these bullet points you will need to draw up an action plan. Included in this plan will be scrutiny of your business tax position – consideration of these tax issues are listed separately in the following section.

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