---
title: Understanding your Numbers | Accounting Service
description: Your Profit and Loss, Balance Sheet and other key terms.
---

[Skip to content](https://help.1stformations.co.uk/accounting-service/understanding-your-numbers#main-content)

[![image 4](https://help.1stformations.co.uk/hubfs/image%204.svg)](https://www.1stformations.co.uk/)

- [Help Centre](https://help.1stformations.co.uk/)

Open main navigation

Close main navigation

- [Help Centre](https://help.1stformations.co.uk/)
- [Login](https://www.1stformations.co.uk/login/)

[Login](https://www.1stformations.co.uk/login/)

 How can we help you?

- There are no suggestions because the search field is empty.

1. [Accounting Service](https://help.1stformations.co.uk/accounting-service)
2. [Understanding your Numbers](https://help.1stformations.co.uk/accounting-service/understanding-your-numbers)

# Understanding your Numbers

 Your Profit and Loss, Balance Sheet and other key terms.

## Key Accounting Terms Explained

- [Profit and loss vs balance sheet](https://help.1stformations.co.uk/accounting-service/profit-and-loss-vs-balance-sheet)
- [What is VAT and how it flows through your business](https://help.1stformations.co.uk/accounting-service/what-is-vat-and-how-it-flows-through-your-business)
- [The director's loan account explained](https://help.1stformations.co.uk/accounting-service/the-directors-loan-account-explained)
- [Cash basis vs accruals: which does your company use](https://help.1stformations.co.uk/accounting-service/cash-basis-vs-accruals-which-does-your-company-use)
- [Retained earnings, dividends, and why they matter](https://help.1stformations.co.uk/accounting-service/retained-earnings-dividends-and-why-they-matter)

## Reading your Financial Reports

- [How to read your Profit and Loss report](https://help.1stformations.co.uk/accounting-service/how-to-read-your-profit-and-loss-report)
- [How to read your Balance Sheet](https://help.1stformations.co.uk/accounting-service/how-to-read-your-balance-sheet)
- [What your Aged Receivables report tells you](https://help.1stformations.co.uk/accounting-service/what-your-aged-receivables-report-tells-you)
- [Understanding cash flow vs profit](https://help.1stformations.co.uk/accounting-service/understanding-cash-flow-vs-profit)
- [How to spot an error in your own reports](https://help.1stformations.co.uk/accounting-service/how-to-spot-an-error-in-your-own-reports)

## Using Your Numbers to Make Decisions

- [What your gross margin tells you about pricing](https://help.1stformations.co.uk/accounting-service/what-your-gross-margin-tells-you-about-pricing)
- [When to consider hiring: the numbers to check first](https://help.1stformations.co.uk/accounting-service/when-to-consider-hiring-the-numbers-to-check-first)
- [How to estimate your Corporation Tax before year-end](https://help.1stformations.co.uk/accounting-service/how-to-estimate-your-corporation-tax-before-year-end)
- [Planning dividends around the higher rate threshold](https://help.1stformations.co.uk/accounting-service/planning-dividends-around-the-higher-rate-threshold)
- [Using your Balance Sheet before making a major purchase](https://help.1stformations.co.uk/accounting-service/using-your-balance-sheet-before-making-a-major-purchase)

## Your Compliance Calendar

- [Your annual filing and payment deadlines at a glance](https://help.1stformations.co.uk/accounting-service/your-annual-filing-and-payment-deadlines-at-a-glance)
- [What happens if you miss a Companies House deadline](https://help.1stformations.co.uk/accounting-service/what-happens-if-you-miss-a-companies-house-deadline)
- [What happens if you miss a Corporation Tax deadline](https://help.1stformations.co.uk/accounting-service/what-happens-if-you-miss-a-corporation-tax-deadline)
- [What happens if you miss a VAT deadline](https://help.1stformations.co.uk/accounting-service/what-happens-if-you-miss-a-vat-deadline)
- [HMRC penalty and interest rates: what you will be charged](https://help.1stformations.co.uk/accounting-service/hmrc-penalty-and-interest-rates-what-you-will-be-charged)

- [Your Plan](https://help.1stformations.co.uk/accounting-service/your-plan#main-content)

    - [Understanding Your Plan](https://help.1stformations.co.uk/accounting-service/your-plan#understanding-your-plan)
    - [Compliance Included in Your Plan](https://help.1stformations.co.uk/accounting-service/your-plan#compliance-included-in-your-plan)
    - [Your Xero Plan](https://help.1stformations.co.uk/accounting-service/your-plan#your-xero-plan)
    - [Add-ons Explained](https://help.1stformations.co.uk/accounting-service/your-plan#add-ons-explained)
- [Working with Us](https://help.1stformations.co.uk/accounting-service/working-with-us#main-content)

    - [How to Contact Us](https://help.1stformations.co.uk/accounting-service/working-with-us#how-to-contact-us)
    - [Your Accountant and Support Team](https://help.1stformations.co.uk/accounting-service/working-with-us#your-accountant-and-support-team)
    - [Keeping Your Details Up to Date](https://help.1stformations.co.uk/accounting-service/working-with-us#keeping-your-details-up-to-date)
- [New Company Essentials](https://help.1stformations.co.uk/accounting-service/new-company-essentials#main-content)

    - [Getting Started](https://help.1stformations.co.uk/accounting-service/new-company-essentials#getting-started)
    - [Before and Beyond Trading](https://help.1stformations.co.uk/accounting-service/new-company-essentials#before-and-beyond-trading)
- [What You Can and Can't Claim](https://help.1stformations.co.uk/accounting-service/what-you-can-and-cant-claim#main-content)

    - [Benefits, Perks, and Grey Areas](https://help.1stformations.co.uk/accounting-service/what-you-can-and-cant-claim#benefits-perks-and-grey-areas)
    - [Mileage, Travel and Subsistence](https://help.1stformations.co.uk/accounting-service/what-you-can-and-cant-claim#mileage-travel-and-subsistence)
- [Xero Training and Analytics](https://help.1stformations.co.uk/accounting-service/xero-training-and-analytics#main-content)

    - [Weekly Xero Training Sessions](https://help.1stformations.co.uk/accounting-service/xero-training-and-analytics#weekly-xero-training-sessions)
    - [Xero Health Checks](https://help.1stformations.co.uk/accounting-service/xero-training-and-analytics#xero-health-checks)
    - [Syft Analytics](https://help.1stformations.co.uk/accounting-service/xero-training-and-analytics#syft-analytics)
- [Tax Reviews and Webinars](https://help.1stformations.co.uk/accounting-service/tax-reviews-and-webinars#main-content)

    - [Annual Tax Efficiency Review](https://help.1stformations.co.uk/accounting-service/tax-reviews-and-webinars#annual-tax-efficiency-review)
    - [Quarterly Business Performance Review](https://help.1stformations.co.uk/accounting-service/tax-reviews-and-webinars#quarterly-business-performance-review)
    - [Topical Webinars](https://help.1stformations.co.uk/accounting-service/tax-reviews-and-webinars#topical-webinars)
- [Bookkeeping Basics](https://help.1stformations.co.uk/accounting-service/bookkeeping-basics#main-content)

    - [Day-to-Day Bookkeeping Workflow](https://help.1stformations.co.uk/accounting-service/bookkeeping-basics#day-to-day-bookkeeping-workflow)
    - [Bank Reconciliation](https://help.1stformations.co.uk/accounting-service/bookkeeping-basics#bank-reconciliation)
    - [Recording Sales and Purchases](https://help.1stformations.co.uk/accounting-service/bookkeeping-basics#recording-sales-and-purchases)
    - [Managing Receipts and Best Practice](https://help.1stformations.co.uk/accounting-service/bookkeeping-basics#managing-receipts-and-best-practice)
- [VAT Registration and Submissions](https://help.1stformations.co.uk/accounting-service/vat-registration-and-submissions#main-content)

    - [Do I Need to Register for VAT](https://help.1stformations.co.uk/accounting-service/vat-registration-and-submissions#do-i-need-to-register-for-vat)
    - [Submitting VAT Returns](https://help.1stformations.co.uk/accounting-service/vat-registration-and-submissions#submitting-vat-returns)
    - [VAT on Sales and Purchases](https://help.1stformations.co.uk/accounting-service/vat-registration-and-submissions#vat-on-sales-and-purchases)
    - [VAT Payments and Schemes](https://help.1stformations.co.uk/accounting-service/vat-registration-and-submissions#vat-payments-and-schemes)
- [Paying Yourself and Employees](https://help.1stformations.co.uk/accounting-service/paying-yourself-and-employees#main-content)

    - [Paying Directors: Salary vs Dividends](https://help.1stformations.co.uk/accounting-service/paying-yourself-and-employees#paying-directors-salary-vs-dividends)
    - [Your Payslip and National Insurance](https://help.1stformations.co.uk/accounting-service/paying-yourself-and-employees#your-payslip-and-national-insurance)
    - [Dividends: Legal Process](https://help.1stformations.co.uk/accounting-service/paying-yourself-and-employees#dividends-legal-process)
    - [Payroll Essentials for New Directors](https://help.1stformations.co.uk/accounting-service/paying-yourself-and-employees#payroll-essentials-for-new-directors)
    - [Hiring and Employment Status](https://help.1stformations.co.uk/accounting-service/paying-yourself-and-employees#hiring-and-employment-status)
- [Corporation Tax and Year-End](https://help.1stformations.co.uk/accounting-service/corporation-tax-and-year-end#main-content)

    - [Corporation Tax Fundamentals](https://help.1stformations.co.uk/accounting-service/corporation-tax-and-year-end#corporation-tax-fundamentals)
    - [Allowable Expenses and Year-End Planning](https://help.1stformations.co.uk/accounting-service/corporation-tax-and-year-end#allowable-expenses-and-year-end-planning)
    - [PAYE and Payroll Basics](https://help.1stformations.co.uk/accounting-service/corporation-tax-and-year-end#paye-and-payroll-basics)
    - [Director's Loan and HMRC Communications](https://help.1stformations.co.uk/accounting-service/corporation-tax-and-year-end#directors-loan-and-hmrc-communications)
    - [Losses, Rates and Reliefs](https://help.1stformations.co.uk/accounting-service/corporation-tax-and-year-end#losses-rates-and-reliefs)
- [Invoices & Payments](https://help.1stformations.co.uk/accounting-service/invoices-payments#main-content)

    - [Creating Invoices and Getting Paid](https://help.1stformations.co.uk/accounting-service/invoices-payments#creating-invoices-and-getting-paid)
    - [Invoice Numbering and Record Keeping](https://help.1stformations.co.uk/accounting-service/invoices-payments#invoice-numbering-and-record-keeping)
- [Personal Tax for Directors](https://help.1stformations.co.uk/accounting-service/personal-tax-for-directors#main-content)

    - [Drawing Money from Your Company](https://help.1stformations.co.uk/accounting-service/personal-tax-for-directors#drawing-money-from-your-company)
    - [Self Assessment Practical Guide](https://help.1stformations.co.uk/accounting-service/personal-tax-for-directors#self-assessment-practical-guide)
    - [National Insurance and Benefits](https://help.1stformations.co.uk/accounting-service/personal-tax-for-directors#national-insurance-and-benefits)
    - [Household Finances](https://help.1stformations.co.uk/accounting-service/personal-tax-for-directors#household-finances)
- [Using Xero](https://help.1stformations.co.uk/accounting-service/using-xero#main-content)

    - [Getting Started with Xero](https://help.1stformations.co.uk/accounting-service/using-xero#getting-started-with-xero)
    - [Bank Feeds and Making Tax Digital](https://help.1stformations.co.uk/accounting-service/using-xero#bank-feeds-and-making-tax-digital)
    - [Xero for VAT and Payroll](https://help.1stformations.co.uk/accounting-service/using-xero#xero-for-vat-and-payroll)
- [Understanding your Numbers](https://help.1stformations.co.uk/accounting-service/understanding-your-numbers#main-content)

    - [Key Accounting Terms Explained](https://help.1stformations.co.uk/accounting-service/understanding-your-numbers#key-accounting-terms-explained)
    - [Reading your Financial Reports](https://help.1stformations.co.uk/accounting-service/understanding-your-numbers#reading-your-financial-reports)
    - [Using Your Numbers to Make Decisions](https://help.1stformations.co.uk/accounting-service/understanding-your-numbers#using-your-numbers-to-make-decisions)
    - [Your Compliance Calendar](https://help.1stformations.co.uk/accounting-service/understanding-your-numbers#your-compliance-calendar)

- Terms & Conditions
- Privacy Policy
- Cookie Policy

[![1stformations logo white](https://help.1stformations.co.uk/hs-fs/hubfs/1stformations%20logo%20white.png?width=142&height=30&name=1stformations%20logo%20white.png "1stformations logo white")](https://www.1stformations.co.uk)

<https://www.facebook.com/> <https://www.twitter.com/> <https://www.instagram.com/> <https://podcasts.apple.com/> [mailto:email@email.com](mailto:email@email.com)

 Copyright 2026 © 1st Formations  
We are proud to be a Certified B Corporation™