Professional services · 🇬🇧 United Kingdom
Partner drawings outrunning profit, invisibly
An LLP where drawings were set annually and profit varied monthly had no visibility of the resulting position.
UK professional services LLP, 5 partners. Client identity withheld — we publish names only with written permission, so this engagement is described by its shape rather than by who it was.
5
Partner accounts rebuilt
Monthly
Drawings vs profit reporting
Corrected
Tax reserve position
The situation
- Partners drew a fixed monthly amount set at the start of the year based on the prior year's profit.
- Profit had softened and drawings had not changed, but nobody was tracking the cumulative position.
What we found
- Cumulative drawings exceeded allocated profit for three of five partners.
- No tax reserve was being held against partner profit shares.
- Current accounts had not been reconciled in over two years.
What we did
- Rebuilt each partner's current account from the last reconciled point.
- Introduced monthly reporting of drawings against allocated profit per partner.
- Established a tax reserve held centrally rather than left to individuals.
The outcome
- Partners can now see their position monthly rather than discovering it at year end, and the tax reserve removed a recurring January cash problem.
- Two partners reduced drawings once the cumulative position was visible.
Start with a conversation
Recognise any of this in your own books?
Thirty minutes. We review where your books stand and where the money's actually going — no obligation.