Amount Falling Due Within One Year

12 May, 2025

I’ve been self employed since 1990. At the time of writing this that’s 35 years.

I’ve learnt that over time markets change and when you’re running a small business you need to adapt quickly. What was once a trending product can soon become outdated or out of favour with your clients.

In my early years of business I was obsessed with sales. Starting a business from scratch means it’s easy to beat the previous year’s turnover (especially if you take virtually nothing the first year). When I had growth I felt indestructible and became over confident.

Now days when I get my set of accounts the first thing I look at is “The Amount Falling Due Within 1 year”. It literally says what it does on the tin and it’s the liabilities your company has to pay within the next 12 months.

These usually include:

Money owed to Suppliers
Overdrafts
Payroll expenses & PAYE
Rent/Mortgage & taxes
Portion of long term dept due with a year
Cars & Vans (& in the old days fax machines & photocopiers)

After a period of over confidence and growth my total amount falling due stood at £125,000 around the time of the millennium. I looked at this and realised that £10K a month was going out the door no matter what. I provide a product that is not essential and when the country takes a nose dive (like 2008 banking crash & 2020 COVID) my sales take a hit.

I decided that over a period of time I’d concentrate on this number and focus on substantially reducing it on every year’s accounts. Some years I failed but ultimately I believe this mission kept me in business when things got tight and other well established party companies fell by the wayside.

From 2007 I kept a spreadsheet of the number:

2007 - £79,684
2008 - £68,923
2009 - £73,919
2010 - £77,424
2011 - £38,956
2012 - £35,955
2013 - £49,977
2014 - £62,735
2015 - £59,158
2016 - £49,174
2017 - £43,060
2018 - £22,144
2019 - £17,746
2020 - £15,521
2021 - £13,835
2022 - £36,792
2023 - £37,110
2024 - £24,123

I find a set of accounts fairly confusing and despite 35 years of business I still get confused between creditors & debtors. Focusing on the “Amount Falling Due” section gave me a simple target to beat. I became less obsessed with turnover and profit & loss. I decided that if I made a loss in some years I could ride the wave as long as I kept control of those direct debits.