Most cashflow problems don’t come from nowhere. They build quietly — often in the payroll process — until something forces them into the open. An unexpected HMRC demand. A pension contribution that’s larger than expected. A balance sheet that doesn’t add up when you need it to.

Here are the five signs to watch for.

1. You’re never quite sure what you owe HMRC

If you can’t look at your accounts at any point in the month and know exactly what’s due to HMRC — and when — that’s a cashflow risk. PAYE, NIC and CIS liabilities need to be visible and reconciled, not estimated or guessed at when the payment date arrives.

2. Your HMRC payments feel like surprises

If the amount due each month varies in ways you can’t explain, something isn’t being tracked correctly. Your HMRC liability should be predictable based on your payroll — if it isn’t, the journals or the reconciliation process isn’t working.

3. Pension contributions don’t appear clearly on the balance sheet

Pension liabilities are easy to miss because they don’t go to HMRC — they go to a separate provider. If they’re not posted correctly in Xero, they’re invisible on your balance sheet until the contribution is taken from the bank. That’s a cashflow blind spot.

4. Your accountant adjusts payroll figures at year end

If your accountant regularly makes corrections to payroll-related accounts at year end, it means the monthly process has been producing incorrect figures all year. By the time those corrections happen, you’ve been making decisions based on numbers that weren’t right.

5. Payroll costs look different in the P&L than in the bank

If what you see leaving the bank each month doesn’t clearly match what the P&L shows as payroll cost, something is being posted incorrectly. Employer NIC, pension contributions and net pay should all be visible and reconciled — not lumped together or missing entirely.

What to do

Any one of these signs is worth investigating. All five together suggests the payroll process needs a proper review — not just of the payslips, but of how payroll flows through into Xero, HMRC and your balance sheet.

If any of this sounds familiar, the Free Payroll & HMRC Check is a good place to start — a quick, practical review with a clear action list.