Short version: The best setup is simple, disciplined and fast. Keep posting tidy every week, close the books and ship your management accounts within seven working days, and run a live 52-week rolling forecast so VAT, payroll and supplier runs are visible before they bite. Do it with clear roles (bookkeeper → controller/finance manager → accountant → virtual FD), a month-end reporting timetable, and a few non-negotiable controls.
Compliance anchors (UK 2025/26):
- VAT-registered businesses must keep digital VAT records and file returns using Making Tax Digital–compatible software. GOV.UK
- VAT Returns (and payment) are usually due 1 calendar month + 7 days after the period end. GOV.UK
- Late VAT submissions use a points system; hit the threshold and you’re fined £200, then £200 again for each late submission while at the threshold. GOV.UK
- Late-payment interest on VAT is charged; from 6 April 2025 it’s set at Bank of England base rate + 4%. GOV.UK
- Keep VAT records for 6 years (or 10 years if you use OSS/MOSS). GOV.UK
The roles (plain English)
- Bookkeeper: day-to-day posting, bank feeds and reconciliations, tidy sales/purchase ledgers, expenses capture, VAT preparation and submission via compatible software, and basics like supplier statements.
Related: If you’re unsure who should own which tasks, read Bookkeeper vs Accountant vs Finance Manager (UK). - Accountant: year-end accounts and CT600, tax planning, director pay, oversight of VAT/PAYE, and advice on reliefs/claims.
- Finance Manager / Financial Controller: owns the reporting timetable; delivers management accounts within seven working days; runs AR/AP controls; keeps the 52-week rolling forecast current; leads monthly reviews and actions.
- Virtual Finance Director (fractional): strategy: pricing, margins, funding, board-level KPIs, investor-ready reporting.
Related: If capacity is your constraint, consider the Outsourced finance team / Virtual Finance Office (UK).
The calendar: a month-end timetable that lands in ≤7 working days
Weekly rhythm (keeps month-end light):
- Mon–Fri: daily bank feeds; same-day coding of bills/receipts; expense approvals.
- Mid-week: AR chasing list sent; supplier-run pre-checks.
- Fri: week’s bank reconciliation to £0; exceptions list shared.
Month-end timetable (example):
- Day 0 (month-end): AR/AP cut-offs agreed; last supplier run approved; all feeds synced.
- Day 1–2: bank recs complete; revenue posted; expenses and prepayments posted; WIP/deferred income captured.
- Day 3–4: accruals; FX revaluations (if any); review unmatched items; VAT working.
- Day 5: finance manager reviews draft management pack; issues list to owners.
- Day 6–7: finalise P&L, balance sheet, cash, aged AR/AP, KPI page; add short commentary and actions; publish and meet.
Related: Debating frequency? See Monthly vs quarterly bookkeeping, cashflow and risk trade-offs (includes VAT timing and risk). VAT Returns are usually due 1 month + 7 days after period end, so plan cash early. GOV.UK
Controls that actually prevent errors and fraud
Bank & cash
- Weekly bank reconciliation to £0; month-end reconciliation signed and retained.
- No shared logins; enable 2FA; review user access quarterly.
Sales (AR / credit control)
- Credit-control schedule (e.g., weekly): reminder → second chase → call → final notice; track debtor days.
- Price/discount authorisation documented; revenue recognition rules (retainers vs projects).
Related: If cash surprises you between month-ends, start a 52-week rolling forecast to surface VAT, payroll and supplier runs earlier.
Purchases (AP / payment runs)
- Three-way check (PO/contract, invoice, receipt) where sensible for services.
- Supplier bank change verification (call-back to a known number).
- Dual approval for pay runs; payment file prepared by A, approved by B (segregation).
Month-end quality
- Journal checklist: accruals, prepayments, deferred income/WIP, payroll journals, FX revaluations.
- Variance rules (e.g., >£X or >Y% must be explained).
- Documented timetable with named owners; pack and commentary stored centrally.
VAT / compliance
- Keep digital VAT records and file using compatible software (MTD). GOV.UK
- Use a deadline calendar and back-up reviewer to avoid late-submission points/£200 penalties and late-payment interest. GOV.UK
- Keep VAT records 6 years (10 for OSS/MOSS). GOV.UK
Related: Avoid “from £XXX” surprises when you implement tooling, check Hidden bookkeeping fees (UK) (bank-feed pass-throughs, capture-app credits, multi-currency tiers).
The management pack (what “good” looks like)
- Core: P&L, balance sheet, cash summary, aged AR/AP.
- KPIs: revenue per head, gross margin, debtor days, utilisation (if relevant), pipeline snapshot (light).
- Short commentary: 10–12 bullets answering “what changed and what we’ll do next.”
- Appendix: WIP/deferred income note, capex and hiring tracker.
- Next actions: owner + date.
Related: Unsure what to include? See Bookkeeping outsourcing costs UK (2025/26) for what’s normally in scope each month, and Hidden bookkeeping fees (UK) for add-ons often missed in quotes.
Worked examples (5–30+ staff, service SMEs)
A) ~10 staff (single entity, single currency)
- Roles: bookkeeper + accountant; fractional finance manager a few hours per month.
- Calendar: weekly bank recs; pack in ≤7 working days; monthly AR chasing list.
- Controls: dual approval for payment runs; supplier change check; variance rules (>£500 or >10%).
- Outcome: clear pack, fewer cash surprises; VAT return prepared on time.
Related: If you’ve got a backlog to fix first, read Catch-up/clean-up bookkeeping cost (UK).
B) ~20–25 staff (projects/retainers; some USD/EUR)
- Roles: bookkeeper + finance manager/controller; accountant; FD quarterly.
- Calendar: day-by-day timetable; FX revaluations; revenue recognition rules; pack ≤7 days.
- Controls: AR escalations; AP three-way checks for larger spends; documented journal checklist.
- Outcome: reliable board pack; faster debtor collections; VAT filed without last-minute fixes.
C) 30+ staff (multi-team; approvals needed)
- Roles: outsourced finance team / virtual finance office covering AP/AR → controller → virtual FD.
- Calendar: strict reporting timetable; mid-month cash review; quarterly plan vs actuals meeting.
- Controls: role-based access, maker-checker payments, supplier bank change verification, monthly access review.
- Outcome: scalable process with holiday cover; fewer reworks; clean audit trail.
RACI: who owns what (keep it lightweight)
| Task / outcome | Bookkeeper | Accountant | Finance Manager / Controller | Virtual FD |
|---|---|---|---|---|
| Weekly posting & bank recs | R | C | A | I |
| AR chasing list & reviews | R | I | A | I |
| Supplier runs & approvals | R | I | A | I |
| Month-end journals & checklist | R | C | A | I |
| Management pack ≤7 working days | C | C | A/R | I |
| 52-week rolling forecast | I | C | A/R | C |
| VAT prep & submission | R/C | A | C | I |
| Board-level actions / strategy | I | I | C | A |
A = Accountable, R = Responsible, C = Consulted, I = Informed.
Your first 90 days (implementation plan)
Days 1–10: access, bank feeds, app logins; tidy chart of accounts; agree reporting timetable and pack index.
Days 11–30: run a “pilot” month-end to test the timetable; fix AR/AP hygiene; set payment controls.
Days 31–60: adopt variance rules and commentary; embed AR chasing schedule; publish first full pack ≤7 days.
Days 61–90: add the 52-week rolling forecast; quarterly plan vs actuals; handoff to steady-state.
Use these while you read (no downloads needed)
- Month-end timetable (≤7 working days) — copy the Day 0–7 sequence above and make it yours.
- Management pack index — P&L, balance sheet, cash summary, aged AR/AP, KPIs, short commentary, actions.
- Controls to put in place — weekly bank rec to £0; maker-checker payments; supplier bank change verification; variance rules; quarterly access review.
- Board view — start meetings with the 52-week rolling forecast, then the management pack.
Related: Costing a future setup? Read Bookkeeping outsourcing costs UK (2025/26). Avoid surprises with Hidden bookkeeping fees (UK). If history is messy, start with Catch-up/clean-up bookkeeping cost (UK).
Questions to use when you buy (no-surprises script)
- What’s in the monthly deliverable? We expect a pack within seven working days (P&L, BS, cash, aged lists, commentary).
- Who prepares and submits VAT, and with which MTD-compatible software? We expect on-time returns and no points/interest exposure. GOV.UK
- AR/AP scope: chasing schedule and supplier-run approvals; who signs off bank changes.
- Volumes & overage: price based on our bank lines/invoices/bills; what’s the overage rate?
- Apps & fees: any bank-feed pass-throughs; capture-app bundles/credits; what happens if volumes spike or we pause a licence.
- Access & exit: who owns the data; standard exports and read-only steps on exit.
- If we have a backlog: quote clean-up as a separate project with a definition of “steady state”.
FAQ (plain English)
Do I need monthly bookkeeping to comply with MTD for VAT?
MTD requires digital VAT records and compatible software. Monthly bookkeeping isn’t mandated, but it’s the easiest way to stay compliant continuously. GOV.UK
When are VAT Returns and payments due?
Usually 1 month + 7 days after the end of your VAT period. Plan cash early to avoid late-payment interest. GOV.UK
What’s a sensible month-end target?
Aim to publish the management pack within seven working days. Slower usually means late journals or weak AR/AP discipline.
How long must we keep records?
Keep VAT records 6 years (10 for OSS/MOSS). GOV.UK
Can one person do it all?
Short-term, maybe. Long-term it creates delays and key-person risk. Split duties: bookkeeper does; controller checks; accountant reviews; FD sets direction.
Ready to make this work?
- Talk to us: Book a 20-minute planning call we’ll map owners, deadlines and a seven-working-day reporting timetable.
- Do it yourself: Download the DIY Bookkeeping Checklist (UK 2025/26) and the 52-week rolling forecast.