A single profit and loss account is a good measure of a business with one entity, one revenue stream, and straightforward ownership. It stops being a good measure the moment any of those things change. Add a subsidiary, launch a second revenue stream, or bring in a joint venture partner, and a single P&L starts to hide more than it shows, not because the numbers are wrong, but because they’ve stopped answering the questions the business now needs answered. 

This is written for FDs at growing UK owner-managed businesses and scale-ups approaching mid-market maturity. It recognises that their reporting has outgrown a single P&L and there’s a need to understand what replaces it. This is not for finance teams already running mature group reporting. 

Key takeaways

• A single P&L breaks down along three specific lines of complexity: new subsidiaries, new revenue streams, and joint ventures or shared ownership. 
• Consolidated reporting answers what subsidiaries add to group performance. 
• Segmental analysis answers which revenue streams are actually driving results. 
• Management accounts structure has to evolve to represent joint ventures and shared ownership accurately. 

Each of the three areas below maps to one of these complexity drivers, since treating them as generic reporting topics misses why they’re needed in the first place. 

Here’s what we cover:

Why a single P&L stops being enough

A single P&L aggregates everything into one set of numbers, which is exactly what makes it limited once a business is no longer a single, simple thing. Aggregated revenue can rise while the underlying business mix shifts unfavourably. Aggregated margin can look healthy while one entity subsidises another. A joint venture’s results can sit awkwardly inside consolidated figures that assume full ownership. None of these problems show up in a single P&L, because a single P&L isn’t built to show them. 

The table below sets out the three most common drivers of this shift and what each one requires from reporting. 

Complexity driver	What breaks in a single P&L	What’s needed instead
New subsidiaries	Group performance is hidden inside one aggregated figure.	Consolidated reporting with entity-level visibility.
New revenue streams	Strong and weak product lines average each other out.	Segmental analysis by revenue stream.
Joint ventures / shared ownership	Full consolidation misrepresents partial ownership.	Management accounts structured for shared ownership.

Consolidated reporting: Seeing the group, not just the parent

As soon as a second entity joins the group, the parent company’s P&L stops representing the business. Consolidated reporting brings subsidiary results together in a way that shows both the group total and the entity-level detail behind it, so a strong group number doesn’t quietly mask one underperforming subsidiary. This needs a consistent chart of accounts and reporting calendar across entities; without that, consolidated numbers look precise but rest on inconsistent underlying data. 

This reporting need often arrives alongside consolidation speed becoming a bottleneck in its own right, which is a related but separate problem covered in Group consolidation: Why it takes so long and how to fix it. See also multi-entity finance: acquire and expand for how this complexity typically arrives. 

Segmental analysis: Seeing performance by revenue stream

A business that launches a second product line, enters a new market, or adds a services arm alongside a product business will find that a single revenue figure increasingly hides the story. Segmental analysis breaks results down by revenue stream, showing which parts of the business are actually generating growth and which are being carried by the others. Done well, it uses the same underlying data as the P&L, just structured by dimension rather than collapsed into one total, so segment reporting doesn’t become a separate manual exercise from the core close. 

Reporting built to cut the same data multiple ways, rather than requiring a separate process per view, makes this far more sustainable. See how Sage Intacct’s financial reporting capabilities support segmental views without duplicating the reporting effort. 

Management accounts structure: Accounting for joint ventures

Joint ventures and shared ownership structures don’t fit neatly into either full consolidation or a simple investment line. Management accounts need to represent the group’s actual economic interest, typically through equity accounting or proportionate consolidation depending on the level of control, and that structure has to be built into the reporting process rather than adjusted for manually each period. Getting this wrong doesn’t just misstate one line; it distorts group margin and return metrics that depend on it. 

This level of structural flexibility depends on the underlying reporting platform, not just the accounting policy chosen. See how Sage Intacct’s platform capabilities support more complex ownership structures, and our guide to accounts payable management best practices for how clean transactional data feeds accurate management accounts at this level of complexity. 

Final thoughts: What a mature group reporting structure looks like

None of these three areas works well in isolation. Consolidated reporting without segmental analysis hides which parts of the group are actually performing. Segmental analysis without a consistent chart of accounts produces numbers that don’t tie back to the consolidated total. And a joint venture structure bolted onto either after the fact tends to require manual adjustment every period rather than sitting cleanly inside the reporting process. 

A reporting structure built to handle group consolidation quickly also tends to support these other views more easily, since they draw on the same underlying data. Timely, closed numbers matter here too: see why UK finance teams can’t close faster for what typically slows the close down before any of this reporting can happen. 

Explore Sage Intacct for how group financial reporting can be structured around consolidated, segmental, and ownership-aware views without separate manual processes for each. 

Group financial reporting FAQs

When does a business need to move beyond a single P&L?

Typically when one of three things happens: a second entity joins the group, a new revenue stream or market is added, or a joint venture or shared ownership structure is introduced. Each of these makes an aggregated single P&L misleading in a different way, even if the underlying numbers are accurate. 

What is the difference between consolidated reporting and segmental analysis?

Consolidated reporting combines results across entities to show group performance alongside entity-level detail. Segmental analysis breaks results down by revenue stream, product line, or market, regardless of entity structure. A mature reporting setup typically needs both, since they answer different questions. 

How should joint ventures be reflected in management accounts?

This depends on the level of control the group holds, typically resulting in either equity accounting or proportionate consolidation. What matters operationally is that the treatment is built into the reporting structure from the outset, rather than applied as a manual adjustment each period. 

Does segmental analysis require a separate reporting process?

It shouldn’t. Segmental analysis works best when it draws on the same underlying transactional data as consolidated reporting, structured by dimension, rather than requiring a parallel process that risks producing numbers that don’t reconcile back to the group total. 

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The CFO role has always included two jobs: keeping score and shaping strategy. What’s changed is the balance between them. Deloitte’s Finance Trends 2026 report, based on a survey of 1,326 global finance leaders, found that 57% now play a leading role in shaping their organisation’s strategy, and that these strategy-influencing leaders manage 20% more responsibilities than peers who remain focused on financial stewardship alone. 

That shift is well documented, but it doesn’t happen by itself. It depends on three enablers working together: systems that free up time, skills that shift from technical to commercial, and team structures that reorganise around business partnering rather than transaction processing (source: Deloitte, Finance Trends 2026). 

Key takeaways

• The shift is measurable, not anecdotal: Deloitte found 57% of finance leaders now play a leading role in shaping strategy. 
• Systems are the first enabler. UK mid-market finance teams lose significant time to fragmented, manual data consolidation. 
• Skills are the second enabler. Commercial and strategic capability increasingly matter alongside technical accounting knowledge. 
• Team structure is the third enabler. Finance functions are reorganising around business partnering, not just transaction processing. 

Here’s what we cover:

What the shift from scorekeeper to strategist actually means 

A scorekeeper CFO produces accurate, timely numbers about what already happened: the close, the management accounts, the statutory reporting. A strategist CFO does that as a baseline and also shapes what happens next, sitting in decisions about pricing, investment, market entry and resource allocation before they’re made rather than reporting on them afterwards. The two aren’t mutually exclusive; the shift is about how much of the CFO’s time and attention moves from the first to the second. 

None of that shift happens because a CFO decides to spend more time in strategy meetings. It happens because the systems, skills and team structure underneath the role change enough to make it possible. 

Enabler one: Systems that free up time for analysis 

The most basic constraint on any CFO’s move toward strategy is time, and most of that time is currently spent on data assembly rather than analysis. The Access Group’s 2026 survey of 400 UK mid-market CFOs and Finance Directors found that finance teams lose an average of 20 hours a month consolidating fragmented data across disconnected systems, and that 84% of respondents were planning to switch finance software as a result (source: The Access Group, Mid-Market Finance Report 2026).

Twenty hours a month is roughly two and a half working days, recovered only when the underlying systems stop requiring manual reconciliation between them. 

This is the same constraint covered in why UK finance teams can’t close faster: a close that consumes most of the month leaves little time for the analysis that strategic input actually requires. 

Enabler two: Skills that shift from technical to commercial 

Systems create the time; skills determine what happens with it. Deloitte’s research found that 64% of finance leaders plan to build more technical and commercial capability into their function, reflecting a broader shift in what CFOs are expected to bring to the table: not just technical accounting expertise, but the ability to read a market, model a decision, and communicate a recommendation to non-finance stakeholders. 

For CFOs and FDs newly stepping into this expanded remit, this shift often shows up earliest in the first few months of a new role. See our new CFO’s first 90 days checklist for what tends to matter most early on, and our overview of financial planning software for the tools that typically support this more commercial, forward-looking way of working. 

Enabler three: Team structure built around business partnering 

The third enabler is organisational. Finance functions built around transaction processing, one team per process area, tend to reinforce a scorekeeper mindset by design, since the structure itself is built around producing accurate historical numbers. Functions further along this shift tend to layer a business partnering structure on top: analysts and finance leads embedded alongside commercial, operational or sector teams, translating finance data into decisions those teams can act on directly. 

This shows up distinctly by sector. In financial services specifically, the pressure to combine regulatory rigour with commercial agility has pushed this restructuring further and faster than in many other industries; see sustainable growth for financial services firms and Sage Intacct’s financial services experience for how that plays out in practice. 

Final thoughts: What this means for CFOs and FDs building the case internally 

None of these three enablers moves quickly on its own. Systems change takes a business case and a transition period. Skills development takes time and, often, different hiring. Team restructuring takes buy-in beyond the finance function itself. What the data suggests is that businesses treating these as three connected changes, rather than picking one, tend to make the shift faster than those addressing them in isolation. 

For CFOs already working through what a more decision-oriented reporting structure looks like in practice, two related pieces are worth reading alongside this one. 

Explore Sage Intacct for how the underlying finance system fits into this shift as one of the three enablers, not a replacement for the other two. 

CFO role FAQs 

What does “from scorekeeper to strategist” mean for the CFO role? 

It describes a shift in how CFOs spend their time and influence: from primarily producing accurate historical financial reporting toward actively shaping business strategy, pricing, investment and resource allocation decisions before they’re made. Deloitte’s Finance Trends 2026 research found 57% of finance leaders now play a leading role in shaping strategy. 

What is driving the shift in the CFO role in the UK? 

Three connected factors: finance systems that automate data assembly and free up time, a broadening skill set that adds commercial and strategic capability to technical accounting expertise, and team structures that reorganise around business partnering rather than purely transactional processing. 

How much time do finance teams lose to manual data consolidation? 

The Access Group’s 2026 survey of UK mid-market CFOs and Finance Directors found teams lose an average of 20 hours a month consolidating fragmented data across disconnected systems, time that’s recovered largely by removing the need for manual reconciliation between systems. 

Do CFOs need new skills to take on a more strategic role? 

Increasingly, yes. Deloitte’s research found 64% of finance leaders plan to build more technical and commercial capability into their function, reflecting a shift in expectations beyond technical accounting knowledge toward commercial judgement and the ability to communicate recommendations to non-finance stakeholders. 

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Key takeaways

• Saved four days a month on invoicing, freeing staff to focus on customer relationships.
• Customer payment reminders are automatic, removing friction.
• Forecasting looks months ahead for improved stock planning.
• Accounts are visible from any location, saving time and increasing efficiency for staff on the move. 

From very limited stock to more than 100 trucks on the hire fleet, BLC Forklifts has grown steadily since the 1990s. It has served thousands of businesses, from furniture suppliers and caterers to film sets and football stadium advertisers.

In this article, we talk about the secrets of its success, as follows:

How did BLC Forklifts reduce manual admin?

Watch the video above to hear how BLC’s Managing Director, Terry Daniels, and son, Joe Daniels, Director, grew their business, and what success and financial confidence looks like to them. 

This article shows how choosing the right software helped give the BLC team time back to focus on growth, customer satisfaction, and being the go-to for forklift hire and repair across Surrey and South East England. 

BLC used to spend around four days a month on manual invoicing admin.

As the tech-savvy Director of the team, Joe was frustrated.

The old software was slow and office-based, he explains: “We were still on that old school technology of where it was just on one computer and you couldn’t move from there, and you just have to manually back it up every day.”

Invoices took both Joe and an accountant three or four days to manually complete: “We wasted so many man-hours just because there was probably three or four of us all working on finances.”

Joe also needed the ability to forecast a month or two ahead, to keep the business stocked with the right forklifts, including sustainable electric options, and to manage the flow of inventory when customers needed trucks for longer-term projects.

He says: “You need to have hire trucks out there that are on five-year contracts to keep the money coming in evenly.”

Five years ago, the team switched to Sage Business Cloud Accounting, giving them cloud-based access to their finances, forecasting that’s several months ahead, and Sage Copilot assistance for invoice reminders.

The savings were immediate. They gained back five days a month, invoicing now only taking a few hours, with the ability to see stock bottlenecks at a glance.

I would have to write it on paper, would give it to the person who does our accounts. She’d then type out each individual invoice separately, and then we’d have to go down to the post office and post them. So, it’s very long-winded.

Joe Daniels, Director, BLC Forklifts

How does automation help?

Using Sage meant that the BLC team could re-focus on customer relationships, making sure the personal touch was carried through at every step, and helping the business to grow through word of mouth recommendations plus in-person care.

Terry remains traditional in his approach to customers, saying: “I’ll pop round and see you. And that’s the best thing to do. And then you meet someone, you set up a relationship.”

Joe recognises the impact of tech making life easier, using Sage Copilot to send customer payment reminders without the nagging: “Now it’s just like a reminder, and they know when it was due or that it’s overdue, and they can just do it without any sort of negative connotations behind it.”

Visibility into the business finances has also improved, as the team can access the financials from anywhere, as Joe remarks: “Everything’s updated in the system, live. It’s easier.”

The level of automation means Joe saves time managing the month-end: “I can just do it straight away, and everything’s done straight there from one desk rather than two.”

I just click one button, and it does a whole statement run for all my customers and emails them all.

Joe Daniels

How does a forecasting solution help with proactive planning?

Since using Sage, the team can now manage stock more easily.

Joe explains: “It predicts how your cash flow is going to come in […] It’s pretty good at forecasting where you’re going to be, at least in a month or a quarter’s time.”

With Sage, it tells you how much money you’re going to have going out, and how much money you’ve expected to come in, or you do have in. You can balance and see exactly where that line is.

Joe Daniels

How does a brand build a solid reputation?

When it comes to supporting their local community, Joe explains: “We do have to make tough financial decisions, knowing, not just disposable income, but how much money we’ve got to play with.”

Financial visibility is essential as it supports Joe’s ability to decide what charitable giving can be done.

As a local business, the team at BLC often find themselves working with other firms in the same complex, and they like to help the children of the wider business community with sports team shirt sponsorships, as they know that every little helps.

As Joe remarks, it’s more about helping to keep the community supported: “If people needed sponsoring for kits or award ceremonies, we just stepped up and went in there. It’s been more about helping people out and sort of building a nice little family of people.”

This has only strengthened BLC’s reputation, and it’s made possible by a clear view of its financials.

Everything goes full circle, and you’re in the community and you’re trusted.

Joe Daniels

Final thoughts

When dad Terry, now 80, retires, Joe hopes to keep the business’s reputation as solid as on day one.

Using Sage Business Cloud Accounting has given the team at BLC freedom from manual admin, and the time and financial confidence to set up deep roots in the community, make agile financial decisions, and know they can expand thanks to word-of-mouth recommendations from local businesses for generations to come.

[In] the next five years, I’m just hoping that we carry on as we are, for being reliable and building up trust, and letting customers find us, and know that they can trust us.

Joe Daniels

For more inspirational stories, visit our EFL interactive map to reveal more businesses behind the badge.

Frequently asked questions

How can I save time and automate financial admin?

You can save time, trust your data, and grow financial confidence with Sage Business Cloud Accounting plans for any size business that scale with you. Get paid 7 days faster, save 5 hours of manual admin, and get data at your fingertips to give you confidence in your urgent decisions.

What’s a good HR software that will make payroll easier but that grows with my business?

Sage HR offers a customisable, modular plan that will grow with your business. Its mobile-ready platform is built for companies with up to 250 employees. It helps you track employee data on the go and gives employees mobile self-service to track timesheets and holidays as well as a comprehensive offboarding experience.

How can I use AI in my business?

Generative AI found in many financial software systems such as Sage Intacct Copilot can speed up manual processes saving you time, automate invoicing getting you paid faster, and give you proactive insights about your business. With it running in the background, it is the assistant that helps you save time and have the confidence to grow your business without the manual admin.

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A finance system that worked well at £10 million in revenue doesn’t always keep pace at £30 million. That’s rarely because the software broke. It’s because growth changes what a finance system needs to do, and the gap between what it does and what the business now needs widens quietly, month by month, until someone finally asks why the close is taking three days longer than it used to. 

For financial controllers, FDs and CFOs at growing mid-market businesses, that gap rarely announces itself all at once. It shows up as a handful of small frictions that each seem manageable on their own: an extra day here, a workaround there, until the pattern becomes impossible to ignore. 

Key takeaways

• Close cycles that keep lengthening are usually a systems problem, not a discipline problem. 
• Spreadsheet workarounds multiplying outside your finance system is one of the clearest early warning signs that it’s falling behind. 
• Reporting that takes longer each quarter, not less, signals the system isn’t scaling with the business. 
• Struggling to consolidate multiple entities cleanly is a common growth-stage trigger for reassessing your finance system. 
• Gaps in your audit trail create compliance risk long before they surface as a formal finding. 
• These signs rarely appear in isolation. Recognising the pattern early is what separates a planned transition from a forced one. 

Each of these signs is worth examining on its own, because together they build a clear picture of whether your finance system is still supporting growth or starting to limit it. 

Here’s what we cover:

The finance system ceiling 

Every finance system has a ceiling: a point at which transaction volume, entity count or reporting complexity outgrows what the platform was built to handle. Below that ceiling, a system can look perfectly adequate: month-end close finishes on time, reports come out reasonably fast, and finance keeps pace with the rest of the business. 

Growth changes the maths. More transactions mean more manual matching. More entities mean more consolidation work. More stakeholders mean more report formats, cut differently for the board, for investors, for department heads. None of this happens overnight, which is exactly why it’s easy to miss. The system doesn’t fail outright; it just gets slower, one quarter at a time, until the constraint is unmistakable. 

The five warning signs your finance system has become the constraint 

The rationale behind each of these signs is different, but together they’re the clearest diagnostic for whether a finance system is still fit for purpose. The table below summarises each one; the sections that follow go into more detail. 

Warning sign	What it looks like	Why it matters
Longer close cycles	Month-end close creeping from days to weeks, even with the same team and effort.	Delays every downstream report and decision that depends on closed numbers.
Spreadsheet workarounds multiplying	New spreadsheets built outside the system for consolidation, AP, or approvals.	Each one is a single point of failure and a source of version-control errors.
Reporting takes longer, not less	Board and investor reports rebuilt by hand each cycle as entities and detail grow.	Time cost rises with the business instead of staying flat on a scalable system.
Consolidation strain	Intercompany eliminations and currency translation becoming a manual project.	Slows reporting and increases the risk of consolidation errors going unnoticed.
Audit trail gaps	Approvals by email, manual overrides that never make it into a formal log.	Creates compliance risk and slows down audits and regulator queries.

1. Close cycles keep getting longer, not shorter 

A close that used to take five working days creeping to eight, then twelve, is one of the most visible signs of a finance system under strain. It’s tempting to treat this as a team or process issue: tighten the timetable, add a checklist, chase people harder. But when the same finance team, working the same hours, takes longer to close each quarter as transaction volume grows, the constraint is usually the system: manual journal entries, reconciliations that don’t happen automatically, and subsidiary data that has to be chased and re-keyed rather than pulled in cleanly. 

For a closer look at why this happens even in well-run finance teams, see why UK finance teams can’t close faster. 

2. Spreadsheet workarounds are multiplying 

Almost every finance team has at least one spreadsheet holding something the core system can’t. The problem isn’t the first one. It’s the fifth and sixth, each built to bridge a different gap: intercompany allocations, invoice tracking, revenue schedules, approval workflows assembled outside the system because the system doesn’t support them natively. Each spreadsheet is a single point of failure, dependent on the person who built it and vulnerable to version control errors that are hard to catch until a number doesn’t reconcile. 

This is particularly common around accounts payable, where manual matching and approval routing tend to migrate into spreadsheets first. See our guide to accounts payable management best practices for what a more resilient process looks like. 

3. Reporting takes longer every quarter, not less 

As the business grows, the reports finance is asked to produce multiply: more entities to break out, more detail for investors, more cuts of the same data for different audiences. If pulling those reports still means exporting data into spreadsheets and rebuilding formatting by hand, the time cost rises in step with the business, rather than staying flat as it should on a system built to scale. 

A finance platform with reporting and analytics built into its core, rather than bolted on, changes this dynamic. See how Sage Intacct’s platform capabilities support this. 

4. Consolidating multiple entities has become a manual project 

Adding a subsidiary, entering a new market or completing an acquisition changes the maths on consolidation overnight. Intercompany eliminations, currency translation and disparate charts of accounts that were manageable across two entities become a genuine project across five or six, particularly when consolidation still happens through spreadsheets rather than a system designed to consolidate automatically. 

This is one of the clearest growth triggers for reassessing a finance system. Read more in multi-entity finance: acquire and expand. 

5. Audit trails have gaps that are hard to explain 

Manual journal entries, approvals granted by email, and overrides that never made it into a formal log all create the same problem: when an auditor asks who approved a transaction and why, the answer takes longer to find than it should, or doesn’t exist in a form anyone can point to. This rarely causes a problem until it does: a qualified audit finding, a compliance query, or simply hours lost each year reconstructing a trail that should have been automatic. 

Built-in financial controls close this gap by design. See how Sage Intacct’s core financials capabilities maintain a full audit trail as standard. 

Why these signs compound 

None of these five signs sits in isolation. Spreadsheet workarounds introduce errors that extend the close. A longer close delays reporting. Weak reporting infrastructure makes consolidation harder. Manual processes at every stage leave gaps in the audit trail. The effect is a feedback loop: each quarter, finance spends more time producing numbers and less time analysing them, which is usually the opposite of what a growing business needs from its finance function. 

This is also why the question, “When should a business upgrade its accounting software?”, rarely has a single trigger. It’s the accumulation of two or three of these signs appearing together, consistently, over several reporting cycles, that indicates a systems problem rather than a temporary bottleneck. 

What’s adding to the pressure at mid-market scale 

Certain growth events accelerate all five signs at once. The table below sets out the most common triggers and what they typically add to the finance function’s workload. 

Growth event	What it typically adds
Acquisition or new-market entry	New entities and consolidation complexity added in a single step.
Funding round or investor reporting	Reporting demands that increase faster than finance headcount.
Regulatory or sector-specific requirements	An extra compliance layer, particularly in financial services or asset-heavy businesses.
Rising expectations around AI-assisted reporting	Pressure to confirm the current system can support automation and analysis, not just processing.

Finance teams are also increasingly weighing whether their current system can support AI-assisted reporting and analysis at all, rather than treating it as a future consideration. See Sage Copilot: secure by design, AI made ready for finance for what that looks like in practice. 

Recognising the pattern before it becomes a crisis 

Most finance teams don’t replace their system because of a single dramatic failure. They replace it because two or three of these signs have been present for long enough that waiting any longer carries more risk than acting: a missed board deadline, a qualified audit finding, or simply the realisation that the system can’t support the business at its next stage of growth without a disproportionate amount of manual effort holding it together. 

As a general guide, the more of the five warning signs that are present together, and the longer they persist, the stronger the case for a formal review: 

Signs present	What it typically indicates
1 sign	Worth monitoring. May be a temporary bottleneck rather than a systems issue.
2–3 signs, persisting	A pattern rather than a blip. Worth a formal review of the finance system.
4–5 signs, persisting	A strong signal the system is now the constraint on growth, not just a source of friction.

Final thoughts

This is the gap platforms like Sage Intacct are built to close for growing mid-market businesses. Rather than adding another tool alongside the finance system, they remove the need for the workarounds in the first place. Recognising which of these signs apply to your business now is the first step, well before any formal evaluation of new software begins. 

Finance system limitations FAQs 

What are the signs a business has outgrown its finance system? 

The clearest signs are lengthening close cycles, a growing number of spreadsheet workarounds, reporting that takes longer each quarter, difficulty consolidating multiple entities, and gaps in the audit trail. Individually, each can look manageable. Appearing together and persisting over several reporting cycles, they typically indicate the system itself has become the constraint. 

How long should a month-end close take for a growing mid-sized business? 

There’s no single benchmark, since it depends on entity count, transaction volume and sector. What matters more than the absolute number is the trend: a close that lengthens quarter after quarter, even as the finance team’s headcount and effort stay constant, is a reliable sign that manual processes are struggling to keep pace with growth. 

Why do spreadsheet workarounds increase as a business grows? 

Spreadsheets tend to fill gaps a finance system doesn’t cover natively: consolidation, intercompany allocations, approval workflows. As transaction volume and entity count grow, those gaps widen and more workarounds get built to bridge them, each one adding a manual step and a single point of failure to the process. 

What typically triggers a finance system or ERP replacement? 

Growth events tend to be the trigger: an acquisition, entry into a new market, a funding round that increases reporting demands, or an audit finding linked to weak controls. Rather than one dramatic failure, it’s usually the accumulation of several warning signs over multiple reporting cycles that prompts a business to evaluate whether its current system can still support it. 

How does a weak audit trail affect a growing business? 

Gaps in the audit trail (approvals granted by email, manual overrides that aren’t logged) don’t usually cause a problem until an auditor or regulator asks a direct question. At that point, reconstructing the trail takes far longer than it should, and in regulated sectors it can affect the audit outcome itself. 

When should a mid-sized business consider upgrading its accounting software? 

Rather than waiting for one system to fail outright, it’s worth reviewing your finance system when two or more of the five warning signs (lengthening close cycles, multiplying spreadsheet workarounds, slower reporting, consolidation strain, or audit trail gaps) are present together and have persisted for more than a couple of reporting cycles. 

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Managers are being asked to do more than ever.

They’re expected to deliver results, support employee wellbeing, develop skills, manage performance, and help teams adapt to constant change.

But the support around them hasn’t always kept pace. Sage’s HR and Payroll Leaders’ Report found that 78% of HR managers feel more stretched than they did 2 years ago, while 49% feel stressed about their jobs.

 HR managers are also under growing pressure to support stressed line managers across the wider business.

So why are managers today under so much pressure?

The research points to a wider issue: managers are being asked to lead digital transformation, support wellbeing, develop skills, improve retention, and manage performance, but many still lack the time, tools, and support needed to do all those things effectively.

In this article, we’ll look at why pressure is rising and what HR can do to help managers perform without burning out.

Key takeaways

• Manager pressure is rising: 78% of HR managers feel more stretched than they did 2 years ago, while 49% feel stressed about their jobs.
• The role is expanding in several directions: HR managers increasingly expect to spend more time on digital transformation, strategy, employee wellbeing, retention, and skills development.
• Pressure spreads across the organisation: stretched HR managers are also being asked to support line managers dealing with their own workload and people challenges.
• They need additional support to handle this increased responsibility: 86% of survey respondents say that investment in modern HR technology would help tackle their challenges, while 85% say the same about support from senior business leaders.
• Consistent support matters: clear priorities, practical tools, regular check-ins, and early visibility into workload can help managers deal with pressure before it becomes burnout.

Here’s what we’ll cover:

Why are managers under so much pressure?

For HR managers, workloads are becoming broader as well as heavier, with responsibility stretching across more areas of the business.

Sage’s research shows how quickly the role is expanding.

Over the next 5 years, 63% of HR managers expect to spend more time on digital transformation and 60% on strategic planning.

The same proportion expect to do more around employee wellbeing and working practices, while 59% expect to spend more time retaining talent and supporting skills development.

That means managers are increasingly moving between very different demands.

They might be helping set strategy in one meeting, dealing with a wellbeing concern in the next, then trying to solve a skills gap or manage performance later that day.

And the pressure doesn’t stop with their own workload.

HR managers are stretched by their own expanding remit while also being asked to support line managers facing pressure elsewhere in the organisation.

Manager workload challenges are already an issue, and they’re only increasing.

It’s easy to understand why managers are stressed nowadays.

This is why growing pressure on managers shouldn’t automatically be seen as a performance issue.

When the remit keeps expanding, managers need the capacity, tools, and support to expand with it.

Without them, asking people to simply become more resilient only addresses the symptom.

Why manager burnout needs a wider response

When managers are stretched, it can be tempting to focus on the individual: better time management, more resilience training, or another course on managing stress.

But Sage’s research points to a wider support gap. 86% of HR leaders say investment in modern HR technology would help them tackle their challenges, while the same proportion say this about HR-specific AI tools.

85% point to increased upskilling in HR capabilities, and 85% to stronger support from senior business leaders.

At the same time, almost 80% of HR managers report a greater emphasis on building leadership capability, yet many still lack the tools and training they need.

HR leaders also want more support, training, and digital tools for line managers across the wider business.

That creates a clear mismatch.

Expectations are rising, but the support systems, training, and technology available to managers aren’t always keeping pace.

You can help close that gap by making effective management easier: clearer expectations, better access to information, practical training, and regular support built into the way managers work.

The more consistently managers are enabled, the less likely they are to reach the point where pressure has already become burnout.

What happens when managers are overstretched?

Sustained pressure takes its toll on manager wellbeing at work, making it harder for managers to lead with the same level of attention and judgement.

When managers are constantly switching between competing priorities, important parts of the role can get squeezed.

Coaching gets rushed. Feedback is delayed.

Workload problems are easier to miss, and difficult conversations may happen later than they should.

Employees feel the effects too.

Managers shape much of the day-to-day employee experience, from how clearly expectations are set to whether people feel supported when something goes wrong.

When a manager is stretched, providing that consistency becomes harder.

Performance can suffer in a similar way.

An overloaded manager may keep day-to-day work moving, but there’s less space to step back and plan.

Team development can slip, while smaller problems go unnoticed and may eventually become even bigger ones.

How HR can better support managers

You can’t remove every source of pressure, but you can make it easier for managers to handle by giving them better visibility into workload, wellbeing, and performance.

The goal is to give them clearer expectations, practical tools, and regular support before problems build up.

To start with, focus on 4 areas: clearer priorities, practical tools, regular routines, and early visibility into wellbeing and performance.

The advice in this section leans on Sage’s manager enablement starter kit (below), which is included in the full report.

1. Give managers clearer priorities

When everything feels urgent, managers need help deciding what comes first.

Make priorities explicit, especially when new work is added.

Managers should know what matters most, what they’re responsible for, and where they have room to make their own calls.

A 10-minute Monday check-in can help managers confirm priorities, identify blockers, and clarify responsibilities before the week begins.

Use it to confirm priorities and surface anything that could get in the way.

2. Equip managers with practical tools

Make the information managers need easy to access.

Sage’s manager enablement starter kit highlights 3 practical tools that help managers spot problems earlier and make more informed decisions.

• A team insight snapshot brings together absence, overtime, performance, and engagement data so managers can identify trends before they become bigger issues.
• A workload balance heatmap helps managers compare workload against available capacity, making it easier to identify overloaded employees, underused skills, and uneven work allocation.
• A development path builder helps managers identify skills gaps, agree development actions, and track progress towards clear improvement goals.

The goal is to give managers enough visibility to spot emerging problems and act before they escalate.

3. Build support into the working week

Don’t wait for a quarterly review or a problem to escalate before checking how people are doing.

Sage’s manager enablement starter kit recommends simple weekly routines:

• clarify priorities at the start of the week on Mondays,
• check workload and wellbeing midweek on Wednesdays,
• then finish by recognising progress and capturing feedback on Fridays.

These don’t need to become long meetings.

Even 10 minutes can help uncover workload concerns, wellbeing issues, or skills gaps before they begin affecting performance or increasing burnout risk.

Give managers somewhere to turn outside those check-ins too.

A manager forum, HR office hours, or peer network can give them a place to raise difficult questions and learn from others facing similar situations.

4. Track whether managers are coping

Check in on managers themselves, rather than relying only on how their team is performing.

Sage’s manager enablement starter kit suggests a manager confidence score, where managers regularly assess how comfortable they feel handling areas such as conflict, feedback, and performance conversations.

Use that alongside regular conversations about workload and priorities.

A drop in confidence, growing workload, or repeated requests for help can give HR an early signal that someone needs more support.

Start small and grow

Supporting managers doesn’t have to mean launching a major new programme.

Start by identifying one source of pressure you can improve.

Maybe priorities are unclear, or managers don’t have enough visibility into workload.

You might also find that difficult conversations are where they need the most support.

Then introduce one practical change to address it.

That could be a clearer weekly priority check-in, a workload tool, or more regular support from HR.

Once that change becomes part of how managers work, build from there.

The aim is to create consistent support that helps managers address pressure early, before stress, burnout, and performance issues start affecting their teams.

Want to put these ideas into action?

Download the Managers Under Pressure infographic for practical tools, weekly routines, and manager support frameworks you can start using today.

Frequently asked questions about manager pressure and burnout

What causes manager burnout?

Manager burnout can develop when demands keep rising without a corresponding increase in capacity or support.

A broader remit can leave managers juggling competing priorities while still being expected to support the people around them.

What are the signs that a manager is under too much pressure?

Changes in workload can be an early warning sign.

Rising overtime or absence may indicate that pressure is building, while slipping progress can show that a team is struggling to keep up.

Talk to managers directly too.

Ask whether their priorities feel clear and where they’re finding the role most difficult.

Sage’s manager enablement framework also recommends checking managers’ confidence in areas such as feedback and performance conversations.

How can HR support stressed managers?

Start by making the job easier to navigate.

Managers should know what matters most and have access to the information they need without having to chase HR for every answer.

Regular check-ins also give them a chance to raise workload concerns or ask for help before problems escalate.

Support works best when it becomes part of everyday management rather than something offered only when someone is already struggling.

How can organisations reduce pressure on managers?

The first step is to identify where the pressure is coming from.

If unnecessary work is consuming managers’ time, look for ways to remove or simplify it.

If they lack confidence in parts of the role, focus support and training there.

Sage’s research also shows that HR leaders see better technology and stronger senior leadership support as important ways to tackle the challenges they face.

How can technology help managers manage their teams?

Technology can make important team information easier to see in one place.

Instead of piecing together different sources, managers can get a clearer view of workload, wellbeing, and performance and spot potential problems sooner.

Browse more topics from this article

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17 September, 2026
6 min read

Employment status: Meaning and importance

Employment status might sound like a dry topic, but it’s critical for small businesses. Learn what it means in this article.

There’s no better way to round off season one of Sound Advice than with two incredibly talented and experienced freelancers.

And they just so happen to be our hosts of the podcast.

We’re saying a brief farewell to the lovely Bex Burn-Callander as she goes on maternity leave. But luckily, she’s handing over the mic to our new host, esteemed business journalist Kate Bassett.

In this episode, these two brilliant businesswomen discuss not only their highlights from this season, but also their own experiences in the freelancing world and how they’ve found the right balance and the right fee.

Here’s what we cover in this season finale:

Saying goodbye to Bex and hello to Kate

Season one highlights

Getting into business journalism and entrepreneurship

Taking the plunge into freelance work

Working as a freelancer means an unpredictable workload

Finding the right fee as a freelancer

Top tips if you’re just starting your freelance journey

Finding your gold or glory balance

How to prepare for maternity leave as a freelancer

Putting into your pension when you have a limited company

When is it necessary to become a limited company?

Meeting your accountant at a music festival

Once you go freelance, you never look back

Saying goodbye to Bex and hello to Kate

Bex Burn-Callander:

Today is bittersweet for me. I’m about to waddle off on maternity leave for a few months. And while I’m really excited about my new arrival and the opportunity to spend some time with the family, I’m really going to miss this show.

I’m leaving you in really safe hands, however. Stepping into the breach is a fantastic journalist and podcaster, Kate Bassett, who is similarly obsessed with entrepreneurs and startups.

On today’s episode, we’re going to meet Kate, and together we’re going to bring you a Sound Advice first, a freelancer special.

Well, there are 2.2 million of us in the UK. So, if you want to know what it takes to take the plunge and become a freelancer, what business structures might work for you, hacks for success, don’t go away.

Kate, welcome. So excited to chat to you today and introduce you to our fabulous listeners.

Kate Bassett:

Thanks, Bex. I’m so excited to be here. How are you?

Bex Burn-Callander:

I’m well, I’m well. I’m the size of a planet, so I’m about to go on maternity leave.

And I’m on week 38, so I’m a slow-moving, wide load at the moment. But feeling pretty good despite.

Kate Bassett:

You are blooming.

Bex Burn-Callander:

This is episode 50, which is incredibly exciting because we’ve just told so many amazing stories now and had such a diverse range of guests on the show with all these different lessons to share.

Now, you are going to take over as host for season two.

And I know that a lot is under wraps at the moment, but can you share anything about what’s in store, what you’re excited about, what kind of guests you’re likely to bring on?

Kate Bassett:

Yeah, well I can’t say too much at this stage because it’s all top secret and hush, hush.

But we do have a stellar line-up of brilliant entrepreneurs.

We’re going to throw a few surprises in there, and we’re going to be back with a new theme.

So we’re going to miss you, Bex, but we’ve got lots of exciting things in store.

Bex Burn-Callander:

Well, I’ll be listening, I’ll be there. I’m subscribing, so I’ll get the new episode as soon as they land.

Kate Bassett:

Baby in one hand…

Bex Burn-Callander:

Baby in one arm, phone in the other: classic.

Season one highlights

Bex Burn-Callander:

And I don’t know if you’ve been listening to the show, but are there any particular highlights or guests that we’ve had on that you’ve really enjoyed?

Kate Bassett:

They’ve all been brilliant, and I think they’re all so diverse with different stories to share. And I love how they talk about some of their big challenges and how they’ve overcome adversity.

That’s what always really interests me, how you get over those big hurdles.

What have been your top stories from season one? Who have you loved interviewing?

Bex Burn-Callander:

Oh, it’s really hard to pick a favourite. But similar to you, I love the ridiculous stories where it’s the thing that went wrong and the scramble to fix it, and it’s almost surreal. It’s almost too crazy to be real life.

Like the Teemill guys who only had, I think it was £200 to start their business, and that they blew most of their budget on business cards despite the fact they were starting a digital business and realised they were never going to give a single business card away, and then basically had to hack together their first tee shirt printer from an old Epson.

But those stories are wonderful.

And I loved Solveiga Pakštaitė, who we had on really early on in the show, who got ghosted by her investor and had to beg her parents for her wedding fund to pay her staff. And she talked about sitting under a desk and just weeping.

She can laugh about it now, but I love the stories where you see the realness and just what people have to go through to make it work and for their business to survive.

I find that stuff the most inspiring.

Kate Bassett:

Same here, actually.

And I just always think, sometimes you see these fabulous shiny brands, and you forget about all the hardships and those moments of, as you said, rocking backwards and forwards under a desk that has actually got them to that point.

I remember interviewing Jo Malone. And again, it’s such an amazing brand, now owned by Estée Lauder. But she talked about setting up.

She was dyslexic, she had no qualifications at all. She had to teach herself how to make face creams just to survive. And actually, for the first 10 years of that business, it was just her and her husband running it from a tiny flat.

You definitely forget about those moments when you see her beautiful candles and perfumes on the shelves.

Bex Burn-Callander:

It’s those reminders, I can’t remember who said it, but it takes 10 years to make an overnight success.

I feel like this show, we get that reminder almost every week.

Getting into business journalism and entrepreneurship

Bex Burn-Callander:

And you’ve been a business journalist for many years, but you’ve been focused on entrepreneurs for quite a lot of that.

So tell me how you ended up in this space.

Obviously, we’re passionate about these kinds of stories, these human stories, which must have been the lure, but how did you end up writing about these people?

Kate Bassett:

You know what? I have just always loved magazines and just have devoured content. So actually, I was rummaging around in the attic the other day, and I came across these My Little Pony magazines I had from the mid-eighties.

So I must have been about seven or eight. It was 30p an issue, and I was a subscriber. And I’d get my fortnightly mag, and I just used to love it. And then obviously moved on to mags like Smash Hits. Don’t know if anyone remembers that. Just 17, Cosmopolitan. Just absolutely loved magazines.

So when I was at university studying English literature, I started to do loads of work experience placements at publishing companies, newspapers. And one of the mags I was doing a two-week placement for ended up offering me a job.

So that’s how I got into business journalism.

That was such a big break for me, really. It got my foot in the door. But also the founder of that company and the editor was also a columnist for The Financial Times.

I’d been there about a year, and he came over to me one day, and he said, “Kate, I haven’t got time to write my column for The FT today. It’s due in at 5pm. Do you want to have a go?”

And I looked at him, terrified, thinking, oh my god, I’m 23. There’s no way I can write a column for The Financial Times.

But of course, in my enthusiasm and youthful naivety, I was like, “Yes, of course I can do that.”

So then got it done, handed it in on time. The FT were pleased with it, and I ended up to writing his monthly column for The FT, at 23. He just let me take over it because he was really busy, juggling lots of other balls.

Bex Burn-Callander:

But was that with his byline or with your name on it?

Kate Bassett:

I had my own byline. Actually my maiden name was Pritchard, so I’m sure, if you root around on The FT website, you can find Kate Pritchard. And it was the column called Found It on the Net. And that was when I was 23, so that was a really good foray into business journalism.

From there, I just worked with different mags, focusing on entrepreneurs and also diversity and inclusion. Doing a lot with businesswomen.

So just have interviewed some really amazing people over the years. Most of the Dragons [from Dragons’ Den], for example. In fact, someone I interviewed fairly recently was Sara Davies who set up her business Crafter’s Companion when she was still at university.

I think, by the time she graduated, she was turning over half a million. I love chatting to her. She’s still so enthusiastic and down to earth.

But even she was saying that a few years ago she reached the point where she thought she couldn’t take the business any further; she wasn’t the right person to take it to the next level.

So she brought in this wiser, older executive and handed over the keys to the kingdom but then had to sit on the sidelines while he made all the wrong decisions for the business.

So she said that was the moment she realised she needed to step up, hired a coach, just got that confidence to trust her instincts and know that she was the one to take the business further.

So it’s really interesting, yeah. I love hearing these human stories and chatting to people. So, so excited to take on this podcast.

Bex Burn-Callander:

You should get Sara on the show. I love that story.

Kate Bassett:

Yes, we should. Sara, if you’re listening, we want you on the show.

Bex Burn-Callander:

Give us a call.

Kate Bassett:

Yeah.

Taking the plunge into freelance work

Bex Burn-Callander:

So full disclosure, we met many years ago when we were both in gainful employment at a trade mag. But I want to know how you ended up becoming a freelancer.

And was it a gradual process, or did you do the two feet, take the plunge style, I’ve had enough of being paid on time every month, I’m ready for anxiety and stress?

Kate Bassett:

Well, actually yes, I’ve been working as a business journalist for about 20 years. And about eight years ago probably, I started taking on ad hoc freelance projects on the side. It was a real side hustle alongside employment.

And then at the start of the pandemic, so in 2020, I was made redundant from Haymarket. So, at that point, my side hustle became the main gig. So I’ve been freelancing full time since then.

So yeah, it wasn’t out of choice. I had to be shoved, had to be pushed off the cliff. But to be honest, I really haven’t looked back. I’m loving the freedom of it, the flexibility.

But your story’s quite different because you just went in feet first, didn’t you?

Bex Burn-Callander:

Yes. Yeah, but again, I think I was sort of pushed because I’d been the small business editor at The Telegraph, for I think it was about four or five years. And my workload had just become completely unsustainable.

I didn’t know at the time, but I was basically on the verge of a full breakdown. I think I was writing between 10 and 12,000 words a week because I had pages to fill on Tuesday, Wednesday, Friday and Sunday. And I was writing all the features, all the news stories, doing all the interviews, the reporting, the transcriptions, the story getting, all the morning conferences.

And it was like writing a thesis every week, but it was just unsustainable.

I think I was quite naive in that I never even really thought to ask for help. So I can’t even blame my managers because I should have just said at some point, “This is just not possible. I can’t continue anymore.”

Instead, I was like, “Well, clearly I have to leave.” And I actually was going to start my own small business. I was going to start an import business. My mother is from Croatia, and they make really amazing booze.

I’m not going to tell anyone too much about it because who knows? I might still do it one day.

Kate Bassett:

Watch this space.

Bex Burn-Callander:

Watch this space, exactly.

There’s this amazing kind of alcohol that you get in Croatia that you can’t get anywhere else. And it’s really specialised, and they serve at weddings. And I wanted to import that.

But then a little thing called Brexit happened, this is in 2016, and it was the worst possible time to start an import business from Europe.

So I thought, I’ll just do some freelancing in the meanwhile and wait for things to calm down.

And then just loved it and had loads of different kinds of clients, had loads of variety, figured out my approach to freelancing, what the balance would look like for me in terms of what kind of jobs I would take on, the balance of regular clients versus incoming, opportunistic clients.

Admittedly, the Brexit challenge still hasn’t gone away in 2022, so that other business has been parked.

Kate Bassett:

But could come back. So we need to look out for your Croatian booze.

Bex Burn-Callander:

Although the company that I set up to actually sell the Croatian booze, I ended up becoming a limited company a couple of years ago. And that was lying dormant. And my accountant was like, “Oh let’s just use that.”

So the company name I chose for my Croatian business is now my freelancing company. So I’d have to come up with a completely different name. But never mind.

Kate Bassett:

We can do that. We can have a brainstorming session.

Working as a freelancer means an unpredictable workload

Kate Bassett:

You mentioned that one of the reasons you went freelance was because of your unsustainable workload.

So how are you finding it now? Have you had those moments? Because as a freelancer, it’s really hard to say no to work sometimes, isn’t it? Because you don’t know necessarily what the next month’s going to bring.

So, I’ve certainly found there are real peaks and troughs. There are times when I’m inundated, and I’m literally working every hour of day and night. It’s like full time and a half. And then there are other moments where it’s pretty quiet.

So how have you dealt with that?

Bex Burn-Callander:

Took me three years to find the balance.

I think, for those three years, I was a hundred per cent doing up the feast and famine where you would be working every minute and evenings one month and then the next month you would have a week where you didn’t have anything on.

And that sort of worked for me at the time. I had to find the balance once I had my son, who’s three and a half now, because I couldn’t work evenings anymore. Certainly when he was small, he wasn’t in nursery, so I had to have a really structured workday.

The only way to do that, I think, is I have a lot more regular clients that come back at the same time of year with a similar project. Or I do some ghostwriting for some tech CEOs, for example. I know that I’ll speak to one of those guys every Wednesday at this time.

You just get into a rhythm where you can anticipate when the work is coming in.

And then anything that comes in on top of that, like features and commissions, if I can fit them in, I do.

But I’ve also got much better at saying no and saying, “I want to do a good job, and I can’t commit that amount of time right now. Can I introduce you to another freelancer who might be able to take this on, and then maybe I can help you next time?”

And I think that takes time to learn to say no. I don’t know if you found that as well, that in the beginning you just want to be like, “Yes, yes, I’ll do everything.”

Kate Bassett:

I think you are right though that, when you have to say no because of your workload, actually if you can recommend somebody else, it doesn’t feel so harsh, and you don’t necessarily feel like you’re losing them as a client altogether because you’ve still been helpful.

Finding the right fee as a freelancer

Kate Bassett:

Actually, I know you and I have shared projects before, and we’re part of this network of business journalists who are all freelancing. And we’re really collaborative, and we share stuff, and we recommend each other.

Also, we meet up fairly regularly and discuss how much we should be charging because I think that’s a really tricky thing as a freelancer, to know what your value is.

I read this terrifying stat the other day that female freelancers are paid 19.5% less than men, which is really depressing.

We’re undervaluing ourselves.

So I do think it helps when you can meet up with other freelancers and not feel competitive but actually have these really open and honest conversations about how much you’re worth, how much you should be charging, what your day rate is or your fee per word. I think that’s really helpful.

Bex Burn-Callander:

Yeah. I think you can then encourage one another. When you’ve got our little gang of business journalists around a table, there’ll always be someone like, “No, you should not settle for that fee. You need to make sure that they pay you X or Y.”

Or every year inflation rises, and you should be raising your rates.

And it’s really hard to do that as a freelancer, to have the courage to say, “Look, I’m putting up my prices by 10%, 15%, whatever it is.”

But you need sometimes your community behind you, encouraging you but also telling you that that’s what they’re doing, so that you don’t feel like you are this lone freelancer trying to get a fair wage.

Kate Bassett:

Yeah, definitely.

Top tips if you’re just starting your freelance journey

Bex Burn-Callander:

What are your other freelance hacks then?

What are the things that you have found have worked really well for you, as a journalist, yes, but I suppose more generally as well, for freelancers of all stripes?

Kate Bassett:

I think learning to deal with those peaks and troughs like you said, but always trying to have six months of savings at the ready. I think there’s a quote that you should always plan as if winter is coming.

Especially, I also have two children. There have been times where obviously I’ve been on maternity leave, and you just really need to plan for those things and just make sure you’ve got a pot of backup money as a buffer should things go quiet.

God forbid, if there’s another pandemic, you need to prepare for these things if work’s going to dry up.

I think having that variety of clients, which you touched upon earlier as well, a mix of freelance contracts in place really takes the pressure off.

So I did quite a lot of work for the Financial Times. Now, 20 years later, it’s come full circle. And those all-ongoing contracts. Then alongside those, I take on at hoc freelance projects as well. And just having a really good accountant.

I’m actually really lucky that my dad happens to be a chartered accountant, so I get it as a freebie. But he’s really good in just making sure everything’s really tax-efficient, and I’m set up in the right way. I’m expensing everything that I should be expensing. That’s really helpful as well.

I think, if you don’t have a good accountant, just make sure maybe you get a personal recommendation, find someone who’s really going to give you some good advice.

How about you? What are your hacks?

Bex Burn-Callander:

I think those are all really amazing pieces of advice, and I definitely followed all of those, and that’s been a massive advantage in my career.

The only thing I would probably add is that I think it’s useful as a freelancer to make sure that about 30% or so of your income comes from clients that have pots of money, that are resilient to downturns.

An example would be a friend of mine is a yoga instructor, and it’s a part of your disposable income that it’s quite easy to slash if, say, we’re in a cost of living crisis now, people can just cut down on their yoga classes.

But she’s made sure that she does private sessions for some high net worth’s, and that makes up a portion of her income. And that’s income that’s unlikely to go away. Those people are very rarely affected by downturns.

I do some work, for example, with private equity clients. And actually those kinds of companies are as active if not more active during downturns because they’ve raised their funds months, even a year before, and they’re still looking to support growth.

So it’s been useful to just, whatever sector you’re in, think, where is there likely to be resilience in terms of budget?

Then the golden rule as a freelancer… I can’t remember who told me this, and I wish I could attribute it, but it’s what I’ve lived by, is that you have to do two out of three things to be successful as a freelancer.

You have to be good, you have to be on time, and you have to be nice. You can survive as a freelancer if you’re just two out of those three.

So you could be really nice and on time, and your copy can be a bit rubbish. But because you’re on time when you’re really nice, you’ve given your editor plenty of time to fix it, you’ve been easy to work with, they’ll book you again.

If you’re nice and your work is really good, then you can get away with being late sometimes with copy because they don’t have to do any fixes, and you’ve been nice.

But that’s the golden rule. If you can, try and be all three. And that is the secret to repeat work.

Kate Bassett:

Being nice and being kind is massively underrated; not just as a freelancer, I mean across the boards in business.

I’ve interviewed so many high-profile, high-net worth individuals. The ones that stand out for me are the ones that are kind.

Kind leadership, I think, is really crucial in this day and age.

But yeah, I agree. I think if you’re reliable, you’re nice, actually people are going to remember you. I do try and make sure my copy is perfect. But actually, sometimes good is good enough.

Bex Burn-Callander:

Yeah, exactly. And sometimes it’s more important to your client that they just get the words in. It just depends on the particular project. You learn to read the situation as you grow into your freelance career.

But yeah, being nice. As a freelancer you have to be nicer than everyone else because your client will never understand that they are just one of maybe five, 10, 15 clients that you’re working for. They just expect you to be working for them full time.

You can explain that’s not the case, but they want to feel like they’re the most important person in your professional life. And you’re only as good as your last project.

So if you snap or you’re critical of something or you word something badly, that might be the last time you work for that client.

Kate Bassett:

And actually, I did a short stint with a PR agency. I was head of editorial for about seven or eight months, just before I had our first child.

And just working in the PR industry actually really taught me about being reliable, about getting back to people, ideally within an hour of them emailing you. Just really be responsive.

That goes a long way.

Finding your gold or glory balance

Bex Burn-Callander:

I like your point about having an accountant because I was going to ask you the things that you wish you’d known earlier.

I certainly wish I’d just never bothered doing my own self-assessments for the first couple of years I was freelance. It was good to learn how the whole thing worked and to educate myself a bit about what expenses I could use.

But just the stress of it, I wish that I’d done that earlier.

Is there anything else that you’ve learned has become invaluable for your freelance career that you wish you’d done earlier?

Kate Bassett:

I wish I’d been able to say no to work that wasn’t very lucrative.

Sometimes there are things that are going to look really good on your CV but don’t pay the bills. They can take up a lot of time and actually, it’s not worth you doing it. And it’s hard to say no to those things.

But actually, when I look back, they’ve caused a lot of stress, a lot of sleepless nights, and I’ve been paid pittance.

So yeah, I think learning to say no to those things and finding those more lucrative contracts that almost pay the bills, and then you have the freedom to say yes or no to those other things.

Bex Burn-Callander:

I call it the gold or glory balance.

Because it’s usually the glory where, for me, it will be a TV appearance or something. And you think, it’ll be good for my profile, it’s worth doing. But you can’t let it eat too much into the gold portion of your working day because otherwise the sacrifice is too big.

So I do often have that conversation with myself where something comes in, and I think, oh I’d like to do that.

And then you think, right, is it gold or glory? What am I going to get out of this? What’s my long-term plan, and does it fit? Which sounds very grown up.

Kate Bassett:

It does, doesn’t it? We sound really experienced.

I also think having that network of freelancers who are in a similar field to you really is like gold dust.

I don’t think I could have really survived in this industry without that. Just being able to bounce ideas off each other and go to each other for advice has been really helpful.

How to prepare for maternity leave as a freelancer

Kate Bassett:

I did want to ask you Bex, obviously you’re about to go off on maternity leave. How have you prepared for that as a freelancer? How much time are you going to have off? How are you funding that time off?

Because obviously, you don’t have a company to pay your maternity leave.

Bex Burn-Callander:

It’s pretty terrifying, isn’t it?

For most women, well, every woman that has a family and is a freelancer is going to have to work out how she’s going to pay for her maternity leave.

And the first-time round, when my son Charlie was born, we’d just bought our first flat, and my husband and I had no savings. So, I had two weeks off with Charlie, and then I continued to freelance.

And it was the hardest thing I’ve done in my life. It was the classic baby on one knee, laptop on the other. Vomit down your front but still having to hold a professional interview.

Kate Bassett:

Having had two hours sleep max.

Bex Burn-Callander:

This is it.

I don’t know how people have done it during the pandemic when everyone loved video calls. Because I only got away with it because it was just phone calls, so no one could see the state I was in.

Kate Bassett:

The vomit dripping down your top.

Bex Burn-Callander:

Disgusting. All that breast milk everywhere.

Anyway, I’m not going to gross out the listeners too much. But that was a really hard lesson and one that I didn’t want to repeat with our second.

So luckily, I became a limited company. I think it’s a couple of years now. And one of the benefits… There are downsides, but one of the benefits was that I could work my socks off and create some cash buffers in the business.

And unlike when you’re a sole trader, where you are paying income tax on all your earnings in one go, when you’ve got a business, you can just keep your reserves in the business.

And then I can now pay myself a salary through my maternity leave, so that I don’t have to survive on, I think it’s £155 a week you get from the government, as maternity allowance.

Kate Bassett:

That’s not even going to cover your electricity bill.

Bex Burn-Callander:

Which doesn’t… Exactly. Which won’t cover electricity bills, won’t cover my older son in his nursery. His nursery costs over £1,000 a month.

I understand why so many women end up leaving the workforce because it’s hard to make it work financially, especially if you’ve already got kids. But yeah, that’s been really, really helpful.

And plugging into my network of freelancers, so that all my clients who rely on me know that there’s someone who will take over while I’m gone. I can just really focus on being a mum.

I’m planning to take six months. That’s the longest I’ve not worked since I was a kid, so I don’t know how I’m going to adjust to it. I hope that I love it.

I hope that I don’t go in saying I’ll be calling you up Kate, being, “My brain. It doesn’t work anymore, my brain.”

Kate Bassett:

You’ll soon get sucked into the lifestyle of coffee mornings and toddler groups and mini music.

Bex Burn-Callander:

Yeah, hopefully. And Julie Deane actually, who was on the show recently, she made me laugh, and she gave me a kick up the bum.

She was like, “Contrary to what everyone says, your brain doesn’t immediately atrophy when you’re a mum.”

And I was like, “Yes. Thank you. I needed to hear that.”

Kate Bassett:

And actually, you know what? Maybe that’s the time to start working on your Croatian booze business.

Bex Burn-Callander:

It’s possible.

Kate Bassett:

Because actually, I know Judy said when she started her company it was out of necessity. She needed to pay those school bills, I think.

So often when you have kids, those are when you have those entrepreneurial moments of needing to start a new business.

Putting into your pension when you have a limited company

Bex Burn-Callander:

The other benefit, I think, of having a limited company is that I’m going to keep paying into my pension while I’ve got my maternity leave.

That was one of the things that I wish I’d done earlier as a freelancer, it took me a good three years to even think about paying into a pension.

I think that it’s a real terrifying prospect for a lot of freelancers that they are sleepwalking towards a financial future which is very uncertain.

Because you’re not in an employee pension scheme, and you don’t want to be relying on the state pension because who knows what that’s going to look like when we all start retiring in 30, 40 years?

Kate Bassett:

There are a lot of these perks that suddenly you do lose when you come out of employment. No more pensions, no more sick pay, no more holiday pay.

So as you said, you do need that financial buffer in place. And yeah, make sure you’re putting into a private pension regularly.

Do you have a certain rule about what percentage of your salary you put into a pension?

Bex Burn-Callander:

I put in £500 a month. And then, at the end of my financial year, I look at my earnings. If I can top up with a lump sum, I do, depending on how successful that year has been. And that’s worked for me.

It feels funny to be talking about pensions now because the value of people’s pensions have gone down so much with everything that’s going on politically.

But because I’m not planning to retire anytime soon, it’s still a good investment for me because there’s still plenty of time for them to recover.

Kate Bassett:

Exactly. It’s a long-term investment.

When is it necessary to become a limited company?

Bex Burn-Callander:

I’m a limited company, but you are a sole trader.

What made you decide to stay sole trader? Did you think about becoming a company, or did that not make sense?

Kate Bassett:

Not yet. I think, again, for tax efficiency I’m still a sole trader because I’m part time, so it just makes sense at the moment.

I think maybe when the kids are a bit older and I go full time, I would, at that point, set up a company. But for now it doesn’t really make sense.

But again, I think it’s about getting that advice from your accountant on what’s the most tax-efficient thing to do.

Bex Burn-Callander:

And there’s a threshold, I think.

Once you start earning more than £85,000 you have to be registered for VAT, and then you have to be a limited company.

So you reach a point where it’s obligatory that you become a company. Your accountant can tell you. If you’ve got a good accountant, they’ll be able to tell you if your turnover is moving in that direction and that you need to prepare by registering for VAT at that point.

That’s why they’re so useful.

Meeting your accountant at a music festival

Kate Bassett:

How did you find your accountant?

Bex Burn-Callander:

This is an unusual story. Probably won’t be repeated by many listeners. I met my accountant at a music festival. And this was before he was an accountant.

Kate Bassett:

Where all good accountants hang out.

Bex Burn-Callander:

He was actually a barman at a backstage bar at a music festival.

And this is back in my vodka Red Bull phase. He poured the biggest vodka Red Bulls on the whole site, so I got to know him really well.

Kate Bassett:

That’s how he earned your trust.

Bex Burn-Callander:

We became friends. And then he was, I don’t know how soon after that… This is 10 years ago. I’m not sure how soon after that he retrained as an accountant.

But I do think that having the solid basis of friendship there meant that I trusted him immediately and also knew that if I didn’t understand something or if I was worried about anything, I could email him, and he would come back to me really quickly.

He also didn’t charge me for queries. I’d heard so many horror stories about accountants who would charge you £50 for a two-minute phone call or a quick email.

And because we had that background of being pals and knowing each other outside of our professional lives, that trust was really important.

But I have to say, when you are thinking about becoming a limited company, don’t forget that your accountancy fees are going to go up astronomically. I don’t think I’d really thought about that.

When I became a limited company, I went from paying £250 for my end of year accounts to over £1,000 because obviously it’s all the Companies House filings, it’s a lot more arduous for your accountant. Plus, I then had to pay a payroll software company, which is an extra £200.

So yeah, I think you have to be making enough money in your company to stomach the additional costs if you’re going to make that move.

Kate Bassett:

There’s the higher fees and the bureaucracy attached to it.

But then I think, on the plus side, there’s a reputational gain, in some ways, of having a limited company.

It gives you that image of gravitas and size.

Bex Burn-Callander:

Because some big brands don’t want to work with sole traders. They want someone who has a limited company whose VAT registered, who has all the transparency that comes with being a limited company.

Often that means you are on software too. We’re all going to have to be on software soon.

But if you are a limited company, you’ll usually have a software system, so you’ll invoice at the same time every month. There’ll be a lot more stability and consistency to the relationship.

Once you go freelance, you never look back

Kate Bassett:

Having been through all this, Bex, do you think you would ever go back to employment, or are you a freelancer for life now?

Bex Burn-Callander:

Oh God, I don’t know about you. I just don’t think I could ever go back. I can’t imagine it.

Kate Bassett:

So many entrepreneurs say this, that once they’ve run their own company and been their own boss, they’re almost unemployable. And that’s how I feel now.

I never expected to go into business journalism. I was always thinking I was going to write for The Sunday Times Magazine or Style or Cosmo, definitely lifestyle features.

But just because I ended up getting a job out of some work experience at a business magazine, that’s how I ended up in this field. But it’s so interesting.

As you said, you’re just learning new things and sucking up information all the time. Actually, particularly entrepreneurs, these are the people that are keeping the economy ticking and contributing so much to this country.

So, I think we really want to celebrate their stories and shine a light not just on the successes but on some of the real challenges that they’ve been through and how they’ve overcome adversity, so that other people can find it easier when they come to set up their businesses.

Bex Burn-Callander:

Oh, Kate, I can’t wait to hear all of your episodes of this show. That sounds right up my street in terms of approach. I’m going to be tuning in every two weeks.

And thank you so much for stepping into the breach. And best of luck with it.

Kate Bassett:

Thank you, Bex. We’ll miss you, but thanks for handing over your mic.

Inspired by this small business story?

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We are also on Spotify and anywhere else you get your podcasts.

Join our community to share your insights and stories on Twitter @SageUK using the hashtag #SoundAdvicePodcast, on Instagram @SageOfficial or in the comments below!

Want to know more about our new host, Kate Bassett?

You can check out Kate on her website.

You can also find her on Twitter or LinkedIn.

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Recommended

17 September, 2026
6 min read

Employment status: Meaning and importance

Employment status might sound like a dry topic, but it’s critical for small businesses. Learn what it means in this article.

Dealing with invoices is a key business admin task to manage.

From creating your invoices to sending them out and chasing them if they’re late, it can be a time-consuming process.

But get it right and you’ll get paid on time, meaning your cash flow will be in a good place and your business can function effectively.

To help you when it comes to dealing with your invoicing processes, we’ve selected a series of Sage Advice articles covering the likes of what needs to be included on your invoices to dealing with unpaid invoices and how to avoid having difficult conversations with your customers and suppliers.

Here’s what we cover:

How to write an invoice: What needs to be included

When it comes to creating invoices, one option is to use cloud accounting software that allows you to use invoices that can be customised for your business.

You could also use an invoice template, and again tailor it for your business.

However, if you decide to create your own invoices from scratch, you’ll need to know what information to add.

This article will help you with writing and creating your own invoices.

From adding the correct information (making sure your company name and address is added, for example), to being clear on what needs to feature if you’re a sole trader versus a limited company, and even what’s required if you’re creating a VAT invoice, there’s plenty to learn and adopt.

This article covers the following:

• What should be included in an invoice
• Different kinds of invoices
• Common invoice payment terms
• Common invoice payment methods
• Sending your invoice
• How to send your invoice
• How to get paid on time

Learn more about what to include on your invoices.

8 ways to get invoices paid without any awkward conversations

When it comes to dealing with late payments, awkward conversations are likely to come to the fore.

Having to make that tough phone call (or email) to a supplier who is late in paying an invoice can be an uncomfortable experience.

But your business needs the money to avoid cash flow issues, so it’s something that needs to happen.

However, what if you could get your invoices paid without having to opt for a tricky chat? This article can help you adopt a series of tactics that will make your life easier.

From offering numerous ways for your customers to pay you, to setting up regular payments and syncing the time you send your invoices with the payment runs of your customers, it suggests a few things you can try.

This article covers the following:

• How to avoid difficult conversations
• Create an ‘accounts@’ email address
• Know who’s who – and who controls payment
• Sync with payment runs
• Invoice immediately
• Offer many ways to pay
• Know when invoices are read
• Make invoices clear, accurate and attractive
• Set up regular payments

Learn more about getting invoices paid without awkward conversations.

How to recover an unpaid invoice

Spending time chasing unpaid invoices?

No doubt it’s draining your energy while taking you away from running your business.

However, it’s an important task and if your customers are late in paying you, that could have a detrimental effect on your cash flow.

Of course, there might be a good reason why someone is late in paying you (didn’t receive the invoice, dealing with their own cash flow problems, etc), so it’s best to deal with the situation tactically but efficiently.

This article has a series of steps for you to follow to recover those unpaid invoices.

This article covers the following:

• What do to do when your invoice hasn’t been paid (and the steps to take)
• The 3 options for debt recovery for a small business or individual

Learn more about recovering unpaid invoices.

6 important steps to combat unpaid invoices and get paid

Still on the topic of unpaid invoices, accountant Sian Phillips talks about her experience in this area and she shares some advice on how you can deal with the challenge of getting paid on time.

Sian acknowledges that chasing payments can be daunting, however with the right tactics in place, she says you’ll have a better chance of reducing the need to have those awkward conversations that would otherwise be your go-to option.

This article covers the following:

• Ensure the invoice has all the relevant information
• Put your full bank details on all invoices and statements
• Pick up the phone and speak to your customers early
• Keep a journal of all calls and responses
• Amend your invoice issue date (two parts to this point)

Learn more about dealing with unpaid invoices.

Free professional invoice templates

Looking for invoice templates to use for your business? Look no further.

These professional invoice templates from Sage are free, easy to use (they’re Word documents) and you can customise them so you can add the information that’s required.

And there are VAT-compliant version too, in case you need them.

Learn more about the free invoice templates.

FAQs on invoices

What is an invoice?

An invoice is a document showing details of any goods or services sold and requests an amount payable for these services.

Learn more about invoices.

What is an invoice payment?

An invoice payment is a scheduled payment a customer makes toward the balance of goods and services rendered.

Learn more about invoice payments.

Final thoughts on invoices

Chasing payments can be a real challenge, something that definitely takes its toll.

And no doubt, you’d rather spend time building your business than doing that.

By understanding how to create and send your invoices, while following up on them in a timely manner, not only will that help you with your business admin, with a bit of luck, it’ll make your processes a lot smoother too.

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AFC Wimbledon isn’t owned by an investor. It’s owned by the fans. It’s how the club is run, decision by decision, without a backstop to call when things get tight.

That’s why, at Wimbledon, every pound must work harder: for the football club, for its charity arm AFC Wimbledon Foundation, and for the women’s team they’re growing for the long term.

Nowhere is that clearer than in LeaD ON, the Foundation’s female coaching pathway. It’s a programme built on funded qualifications, mentoring, and belief. LeaD ON works because the finances behind it are trusted and built to grow.

That’s what we discuss in this article, as follows:

Creating opportunities from the pitch

Watch the interview above to hear from the Senior Officer for Women & Girls, CEO of the Foundation, and key sponsor for LeaD ON to discover how Sage has given them the clarity they need to invest and grow with confidence, on and off the pitch.

When Senior Officer for Women & Girls, Kate Wells, talks about LeaD ON, she rarely starts with qualifications or coaching badges. She talks about confidence.

For her, LeaD ON is about women taking a first step into a world they never imagined they could be part of. It’s about community, support networks, and seeing people discover what they’re capable of.

LeaD ON was created to help more women find a route into football coaching. Funded locally by philanthropist and sports broadcaster Mary Fitzhenry, the programme was designed to address a gap in female role models and create a sustainable pathway for women and girls interested in the game.

“It takes so much for these women just to take that leap into coaching,” says Kate. “It’s about that community, and it’s about that shared experience.”

Every stage is delivered by women, for women. From leadership qualifications in schools to a mentored coaching programme and fully funded UEFA C Licence access, the pathway equips girls and women with the skills, confidence, and qualifications to become grassroots coaches.

Approximately 30 coaches have progressed through LeaD ON so far. At a recent AFC Wimbledon event, around half of the female coaches present were programme alumni, a significant shift from when Kate first joined the organisation and there was only one female coach involved.

But for Kate, the numbers only tell part of the story. One participant joined the programme after Long Covid forced her to leave work. She had never coached before but decided to give it a try. Within a year, she had progressed through the pathway, secured coaching opportunities, and eventually moved into a full-time role within another football foundation.

“The biggest and most rewarding takeaway,” says Kate, “is actually seeing them grow not just as coaches, but more importantly, grow as people.”

Programmes that are built to last

Stories like this are powerful, but they don’t happen by accident. For organisations like AFC Wimbledon Foundation, creating long-term opportunities means balancing ambition with financial sustainability.

Over the past seven years, the Foundation has grown significantly, increasing turnover from around £300,000 to more than £1 million while expanding the number of programmes it delivers across the local community.

At the same time, AFC Wimbledon itself continues to operate differently from many clubs in professional football.

The club runs one of the division’s smaller playing budgets. Without an individual owner providing financial backing, careful planning and informed decision-making are essential.

“We have to forecast ahead and make sure we’re spending it well,” says Club Finance Director Laurie Hill.

For the Foundation, that same discipline helps ensure programmes like LeaD ON can continue to grow.

“When we’re applying for grant funding or planning future projects, we need complete confidence in our numbers,” explains Foundation CEO Phil Hastings. “The decisions we’re making today affect what we’re able to deliver for our community tomorrow.”

Trusting the numbers to make better decisions

As the Foundation expanded, having a clear understanding of financial performance became increasingly important.

For Finance Officer John Taylor, the value comes down to trust: “As far as the finances of the Foundation go, Sage is the holy grail. What our accounting system says is the truth.”

That confidence allows teams across the organisation to make decisions using the same data, whether they’re managing budgets, planning projects, reporting to funders, or identifying opportunities for growth.

Phil has worked to extend that visibility beyond the finance team.

“It’s not just on the finance team to understand the business side of things,” he says. “It has to be the wider team, understanding their budgets, understanding how to make sure their expenditure is in line.”

Rather than waiting on reports or relying on assumptions, department leaders can see where they stand and make decisions with confidence. For a growing organisation, that visibility creates something valuable: time.

More time for what matters

Sophia Axelsson, General Manager of AFC Wimbledon Women, understands the impact first-hand.

As the only full-time member of staff supporting the women’s team, her time is precious. Previously, preparing reports for the board could consume an entire day each month. Today, working closely with the finance team and using shared financial information through Sage means those reports can be produced almost instantly.

“Now that I’m working much more closely with the finance team, what used to take me a full day a month is done instantly,” she says.

That’s time that can be reinvested elsewhere: supporting players, developing staff, and helping grow a women’s team with roots dating back to 1974.

It’s also time that helps ensure opportunities like LeaD ON continue to thrive. Because while the programme is creating future coaches today, its success depends on something much less visible behind the scenes: the ability to plan, forecast, and invest with confidence.

At AFC Wimbledon, trusted financial data isn’t just about balancing the books. It’s what helps the Foundation back the next generation of female coaches. It’s what gives staff the confidence to pursue growth. And it’s what allows a fan-owned football club to keep investing in its community for the long term.

As Phil puts it: “When we’re out in the community, it is AFC Wimbledon. It’s not AFC Wimbledon Foundation. We’re all one.”

With confidence in their numbers and clarity over where resources are making the greatest impact, AFC Wimbledon and AFC Wimbledon Foundation can focus on what matters most: creating opportunities that last, on the pitch, on the touchline, and throughout the community they serve.

What businesses can learn from AFC Wimbledon Foundation

As AFC Wimbledon Foundation continues to grow its impact across the local community, its experience highlights several lessons for organisations looking to build sustainable programmes of their own:

• Think beyond short-term initiatives: Creating a clear pathway, rather than a one-off programme, helps participants continue developing long after their first interaction.
• Connect financial planning to organisational goals: Understanding where money is being spent and the impact it’s creating makes it easier to invest with confidence.
• Give teams ownership of their budgets: When financial visibility extends beyond the finance department, leaders can make faster and more informed decisions.
• Measure success in people as well as numbers: Strong financial management is important, but so are the outcomes, opportunities, and personal stories that demonstrate real impact.

Final thoughts

AFC Wimbledon Foundation shows how trusted financial data can turn ambition into sustainable action.

With clearer visibility over budgets, teams can make better decisions, plan with confidence, and keep programmes like LeaD ON moving forward.

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Employment status might sound like a dry topic, but it’s absolutely critical for small businesses. It doesn’t just affect tax obligations, but also the rights and protections available to your team. Getting this right means fewer compliance issues and a more positive, transparent relationship with your employees.

In this article, we’ll guide you through each different status in the UK, the importance of each, and the practical steps you can take to ensure your classifications are accurate and compliant.

What is employment status?

In the UK, this status defines a worker’s classification, determining their rights and legal protections at work. It affects tax responsibilities, access to workplace benefits, and many other critical aspects of employment.

The most common types of status include employees, workers, and the self-employed, with each offering different levels of rights and obligations. Determining employment status is not always straightforward, but it’s essential for staying compliant with UK law.

Types of employment status in the UK

These different employment status classifications are crucial as they shape both your obligations as an employer, and the rights of your workers. Here’s a breakdown of the main categories:

1. Worker

A worker is someone who performs services under a contract, though they may not have the same full rights as an employee. Workers have a set of legal protections, including:

However, workers lack some of the employment rights held by employees. For example, workers aren’t entitled to redundancy pay or protection from unfair dismissal. A worker could be someone who works on a zero-hour contract, such as a hospitality staff member who works specific shifts but can decline shifts if they choose.

Key characteristics of a worker

Workers generally have some independence in the workplace. They may agree to work specific hours, but aren’t necessarily tied to a strict employment relationship. Unlike self-employed individuals, however, they don’t control how or when they perform every aspect of the job.

2. Employee

Employees are entitled to a full suite of employment rights, including protections that workers don’t have. Key rights and protections for employees include:

• Statutory sick pay
• Statutory maternity, paternity, and adoption leave
• Redundancy pay (after a qualifying period)
• Right to claim unfair dismissal (after two years of continuous employment)
• Pension contributions through automatic enrolment
• Notice periods and severance pay

Employees typically work under an employment contract that defines their role, responsibilities, and expectations. A full-time office worker, for example, who follows set hours and reports to a manager, would be classified as an employee.

As an employer, knowing which staff members are employees means you can make sure you’re offering the correct benefits and protections.

Key characteristics of an employee

Employees usually have less control over their work than workers or self-employed individuals. Their schedules, job expectations, and work location are generally dictated by their employer, and they are entitled to statutory benefits and rights. An employee is expected to comply with company policies and procedures and often represents the company in their work.

3. Self-employed

Self-employed individuals, on the other hand, are responsible for their own business and often have more freedom than employees or workers. They work independently, may take on multiple clients, and handle their own taxes and National Insurance contributions.

Self-employed individuals typically don’t have rights to statutory sick pay, holiday pay, or redundancy benefits. Examples include freelancers, consultants, and tradespeople, such as a self-employed plumber who works across several clients.

Key characteristics of the self-employed

The self-employed have more independence in their work, handling their own business expenses and controlling how they manage their time and services. They have no obligations to follow set working hours, and they’re financially responsible for their work.

Employment status for tax purposes

Employment status goes beyond employment rights—it’s also a tax consideration. For tax purposes, HMRC assesses factors such as the level of control over work, financial risk, and whether the worker provides their own tools.

For example, if a business provides a worker’s tools and assigns their tasks, they’re more likely to be considered an employee or worker. Misclassifying a worker as self-employed when they’re not can lead to fines and backdated taxes, so it’s really important to review each role carefully.

To help clarify the employment status of your workers, consider:

Why employment status is important

Determining employment status has far-reaching consequences that impact not only your business but also the lives of your workers. Here’s why getting it right is essential:

1. Tax compliance—accurately classifying employment status means that you can meet HMRC’s guidelines. Misclassifying a self-employed worker as an employee (or vice versa) can result in costly penalties and audits.
2. Worker rights—by correctly classifying employees, workers, and the self-employed, you ensure that people receive the correct benefits. Offering the right level of protection builds goodwill and loyalty, while avoiding compliance issues down the line.
3. Clarity and trust—transparent employment classifications build trust with your team members, helping them understand their rights and responsibilities. Workers feel more secure when they know they are receiving their correct entitlements and can have open discussions about their status if they have questions.

Special cases: Directors, volunteers, and officeholders

Some individuals don’t fit neatly into the typical classifications of employee, worker, or self-employed:

• Directors may act as employees if they work under a contract with their own business, but they might also have tax liabilities based on shareholding.

• Volunteers provide services without payment and usually have no legal employment status, although they may have a volunteer agreement.
• Officeholders, like board members, are generally appointed to roles and may have limited employment rights depending on the nature of their role.

Practical steps to determine employment status

If you’re unsure of someone’s employment status, here are some steps to take:

1. Review the contract—does the contract align with the role’s expectations? If it’s a formal employment contract, the worker may be classified as an employee.

2. Use HMRC’s tools—HMRC offers online tools like the Check Employment Status for Tax (CEST) tool, which helps you assess status based on a set of questions.

3. Consult with a legal advisor—employment law can be complex, and seeking guidance from a legal professional ensures that you’re classifying workers correctly.

4. Communicate openly with workers—if a worker’s role evolves, review their status to ensure it still reflects the work they perform. Updating contracts and communicating clearly can help prevent future disputes.

Employment status outside the UK

If you’re hiring internationally, keep in mind that employment statuses and regulations can differ significantly. EU countries may share similar worker classifications to the UK, but always check local laws to make sure you’re compliant. For instance, in the US, classifications include “at-will” employees and independent contractors, each with distinct rights and protections.

Final thoughts

Employment status might seem like an administrative detail, but it has a major impact on your business and the people who work with you.

By understanding the differences between employees, workers, and the self-employed—and carefully classifying directors, volunteers, and officeholders—you’re setting your business up for legal compliance and building trust with your team.

Taking steps to understand and review employment status helps your team know where they stand and ensures you’re on the right side of the law.

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As a sole trader, bookkeeping and managing your accounts are the key tasks you have to deal with.

But because you’re self-employed and looking after so many aspects of the business yourself, it can be easy to let the accounts slide as other tasks frequently take priority.

This article offers advice on what you need to do manage your accounts and bookkeeping as a sole trader.

It talks about getting set up, taxes you’ll need to be aware of, what you need to do to register for VAT (if necessary), and how to stay on top of your finances.

Here’s what we cover:

What is bookkeeping and why is it important?

Bookkeeping involves keeping accurate records of all the money going in and out of your business.

It can be a daunting task as every receipt, invoice, and bill must be logged, however it’s essential for creating the likes of accurate tax returns and business plans.

While accounting covers the more general process of managing your accounts and can involve strategic planning, sole trader bookkeeping goes into the details.

Every single point of income or expenditure is noted, from business transactions to company expenses.

This should be a daily process, to ensure all the transactions from the day are logged correctly.

As a sole trader, the legal and financial responsibility falls on you.

Any errors that incur fines or even legal action will affect you personally, as you are not protected by a Limited Liability Company (LLC).

So, it’s useful to get into good habits right from the start and set up a sensible workflow to help streamline and automate any part of the process you can.

First steps when managing your accounts as a sole trader

Firstly, you’ll need to register with HMRC and make sure you understand its rules on running and naming your business.

As a sole trader, you’re responsible for the business. You’ll be classed as self-employed, although you can still take on staff.

As a sole trader, you must:

You’ll need to keep a record of all your invoices and receipts for six years.

HMRC carries out random checks on businesses to check they are compliant with tax regulations, so you’ll need to hang on to all the paperwork and make sure it’s accurate and up to date.

Anything that’s a business cost (known as allowable expenses) can help reduce your tax bill at the end of the year.

This includes:

• Computers equipment and internet access
• Rent
• Stationery
• Phone bills
• Travel to customer premises
• Motor expenses.

It pays to get into good habits from the beginning when it comes to keeping track of receipts.

If you regularly get the train to go and see your clients, always keep the tickets in a separate part of your bag, or buy them online before you go so you have an email record.

When you buy anything for the business, including a coffee ‘on expenses’, always request the VAT receipt—some shops don’t issue a receipt by default.

What expenses can you claim as a sole trader?

As a sole trader there are a variety of expenses you can claim to offset your expenditure.

• Office supplies: Such as office furniture, a work computer, and stationery
• Travel and accommodation: Transport costs including fuel or hotel stays that you incur for work
• Some clothing: Uniforms, or performance-specific clothes, for example
• Your staff: Contractor pay or staff salary
• Commodities that you buy and sell: Stock and raw materials, such as gold
• Insurance and other financial costs: Bank charges, for example
• Your business premises: Costs such as heating, lighting, and business rates
• Your business promotion: The cost of running websites, marketing, and advertising your company are all claimable
• Business and employee training: Courses to advance your skills or those of your team.

What taxes do you need to pay as a sole trader?

As a sole trader, there are several taxes you have to pay to HMRC:

Income tax

As a sole trader, detailed bookkeeping is crucial as you must report your business profits at the end of each tax year.

Your accountant (if you have one) will need a full set of your accounts showing your sole trader income and expenditure, from which they can work out your tax liability.

You need to pay your tax on this income by the following 31 January (you need to submit your tax return by this date too).

It makes sense to complete this process much sooner – don’t put it off until the night before the deadline.

Once you’re in the system and have paid your first return, you need to pay tax twice a year, on 31 January and 31 July.

This is known as payments on account.

Each payment is equal to half the amount of tax you owe for the previous tax year.

Top tip: It’s good practice to put aside 30% of everything you earn. Consider setting up a separate bank account for this so you know the money is there to pay for tax, National Insurance and VAT when you need it.

National Insurance

When you set up as a sole trader, you need to let HMRC know.

You need to pay your quarterly Class 2 National Insurance bill, which is a basic payment that goes towards your state pension in the future.

Any extra Class 4 National Insurance payments will be calculated by your accountant at the end of your tax year.

Top tip: Sometimes self-employed people have a mix of permanent employment and freelance work on the go. For example, someone who works in a bank during the week but writes children’s books in the evening or has a side business making jewellery. 

Just make sure you’re not doubling up on your National Insurance contributions.

VAT

As a sole trader, you need to register for VAT if your turnover is more than the current threshold, which is £85,000. 

You can register voluntarily even if you are below the threshold, and some sole traders decide to do this because it implies you’re a more established, trustworthy business.

You’ll be able to claim the VAT back on everything you buy for the business, which will be advantageous if the nature of your business is buying stock and selling it on.

If you charge for your time, like a designer or business coach, registering for VAT voluntarily won’t bring you so many financial advantages.

You can opt for the standard VAT scheme or Flat Rate VAT, which was set up to help reduce the admin load for smaller businesses.

In the Flat Rate scheme, you charge your customers at the standard rate of VAT and pay the money back to HMRC at a lower rate, depending on the nature of your business.

Top tip: Make sure you pick the right category – there are lots to choose from and some of them sound similar but have different rates. Do double check with your accountant to make sure everything is in order from day one.

PAYE

As a sole trader, at some point you may need to take on staff.

As a bookkeeper for your sole trader business, you must record the PAYE and National Insurance details accurately and keep them for three years from the tax year-end they are incurred.

This can include:

• Employee pay and any deductions you make including pension schemes
• Employee absence, including leave and sickness
• Expenses or benefits incurred by your staff
• Any charity-matching expenses applied to on the Payroll Giving Scheme.

Open a separate bank account for your business

When you start out, it’s a good idea to set up a separate business bank account so your personal and company finances are kept apart.

This will make it easier for you to manage your accounts and bookkeeping as a sole trader.

It’s one of those jobs you’ll thank yourself for later as your business grows and there are more and more transactions happening relating to the business.

It will also help you keep an eye on cash flow. You need to get into the habit of chasing invoices early to make sure you have plenty of money to cover your business costs.

You could also consider requesting deposits and staggered payments on larger jobs, rather than waiting for the project to be completed in full before you send your bill.

What records do I need to keep as a sole trader and for how long?

Sole trader bookkeeping requires keeping your financial and business records up to date, as a daily process.

HMRC may ask for a detailed breakdown, including receipts, so knowing what to keep track of is essential.

This should include:

• Your business sales and income including invoices and receipts
• Your personal income
• Your business expenses (and those of any staff you employ)
• Any applicable VAT records if you’re registered for VAT
• Any staff PAYE records if you employ people other than yourself.

You may also need to keep other records such as any money you are owed but have not received, your year-end bank balances, or any money you’ve taken out for your own use.

All records and receipts must be kept for a minimum of five years from the 31 January submission deadline of the relevant tax year.

How cloud accounting software can help you

When it comes to managing your accounts and bookkeeping as a sole trader, having an effective, intuitive system in place can make all the difference.

Accurate records

If you are entering all your transactions into cloud accounting software throughout the year, you’ll be keeping accurate records as you go.

Using cloud accounting software as a sole trader also means you can cut down on paper, saving you money and space—the latter may be in short supply in your home office or workshop.

And because each time you add a new supplier to the system you’ll be making note of their full contact details, you don’t have to worry about keeping an address book up to date.

Better chance of getting paid on time

It’s good practice to keep on top of your accounts.

Depending on the size and complexity of your business, this could be monthly or weekly. By finding time to do it regularly you can quickly clear up any queries… what was that receipt for again?

Or you can spot someone who hasn’t paid their invoice on time and gently suggest that you can’t do anymore work until you’re all square.

You can create also quotes and invoices, customised with your branding and full contact details, which can be emailed to customers in PDF format.

This speeds up the whole process of getting the work—and getting paid for it.

And when it comes to getting paid for the products or services you’re selling, using an online payments provider such as GoCardless or Stripe can make life easier.

Submit VAT returns to HMRC

What counts here is speed and accuracy. With accounting software, you can run off your VAT return in minutes, check the figures and submit it to HMRC.

If you set up a direct debit, the money will be deducted on the 10th of the month following your VAT quarter, meaning no missed deadlines and no penalties—good news for the sole trader keeping a close eye on their bank balance.

FAQs on managing your accounts as a sole trader

Do sole traders need bookkeeping software?

There can be a lot of record keeping for sole traders to stay on top of, so bookkeeping software can make keeping accurate records easier.

The government is phasing out non-digital forms of accounting.

From April 2026, the government will introduce Making Tax Digital for Income Tax Self Assessment, where accounting must be done using cloud-based software.

So, starting now will give you plenty of time to get used to the process before it becomes mandatory.

Do I need an accountant as a sole trader?

As a sole trader, you’ll be wearing many hats for your business.

However, accounting is one that you shouldn’t scrimp on as any inaccuracy or failure to register correct tax information can have repercussions for you personally.

Hiring the right accountant for your sole trader business will help free up your time to concentrate on other essential areas, like sales and marketing, or strategy planning.

Do I have to pay VAT as a sole trader?

If your sole trader business earned more than £85,000 in the past 12 months, or will be expected to go over the threshold in the next 30 days, you must register for VAT, and by 30 days of having exceeded the threshold (note, the threshold increases to £90,000 from April 2024)

The government has also made MTD for VAT mandatory.

Now any VAT-registered business, including sole traders, must submit all VAT returns digitally and keep records with cloud accounting software.

Choosing the right software can ensure your records are always up to date.

Editor’s note: This article was first published in September 2018 and has been updated for relevance.

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