All limited companies need to prepare annual accounts for HMRC and Companies House. It is the law to have accounts filed within 9 months of the year end, and failure to comply with Companies House requirements will result in fines and penalties.
Not only are annual accounts required for Companies House, but a set is also needed to be filed alongside the company tax return, when it is submitted to Companies House.
It is not all doom and gloom though, working with a firm of chartered accountants like Spotlight Accounting can help you meet these requirements.
Are annual accounts the same as statutory accounts?
All businesses, whether trading as a sole trader, small business, partnership or limited company, have to prepare annual accounts to calculate the profits that are reported to HMRC.
Limited companies, however, are required to file annual accounts to Companies House within 9 months of the financial year end, in order to comply with the Companies Act 2006. These accounts are referred to as statutory accounts.
The contents of a company’s statutory accounts vary depending on the size of the business. All businesses will need to include details of the company’s financial performance (a profit and loss account), and the companies financial position (the balance sheet).
Larger businesses will need to include a cashflow statement and prepare accounts in accordance with international financial reporting standards.
What is annual accounts preparation?
The annual accounts preparation process involves taking the financial records of the business for the financial year and verifying that all necessary adjustments have been made. The final accounts can then be prepared in accordance with the relevant accounting standards and calculating the company’s tax liabilities.
The company’s annual accounts will include:
1. Balance sheet
This show the company’s financial position at the end of the financial year. It will include everything the company owns, everything it is owed and everything it owes.
2. Profit and loss account
The P&L shows the financial performance of the business for the accounting period i.e how much money it has actually made.
3. Director’s report
A director’s report allows larger companies to be able to give their shareholders a synopsis of the information they need. It will detail how the directors have managed the company on behalf of the shareholders.
4. Notes to the accounts
Notes are there to provide additional information to support the figures in the main financial statements. This is so that the readers of the accounts can have a better understanding. Some of these notes are required by law, whereas some are adopted to help the shareholders understand the accounts.
5. Accountants or auditors report
This is a public document that expresses an auditor’s or accountants educated opinion on the financial status of a company.
Our annual accounts service in Shropshire
Most business owners would rather go to the dentist than their accountant, however at Spotlight Accounting, we try and make the accounts preparation service as pain free as possible.
Most of our clients use Xero or other cloud accounting software, which gives us most of the information we need to prepare the accounts with minimal disruption.
Our annual accounts service is carried out in conjunction with preparing your tax return.
Draft accounts are issued with a video explaining the information that we are presenting so that when we meet, we can talk you through any questions you may have about the accounts, the plans you have for your business and how we can support you in achieving this.
Why outsource your annual accounts preparation to Spotlight Accounting?
There are so many elements to running a business. At Spotlight Accounting we appreciate that your time is more valuable spent concentrating on its growth, rather than ensuring that all the leases are disclosed in the accounts as per UK or International financial reporting standards. After all, let’s be honest, there are better things to read than the accounting standards text books.
Outsourcing your annual accounts to Spotlight Accounting will ensure that you can relax, safe in the knowledge that they are all taken care of whilst meeting all the relevant requirements. And, when you sit down with us, we will ensure that we won’t bamboozle you with lots of numbers, but explain to you exactly what they mean and the impact they have on your business.
If you are interested to find out more about how we can help with your statutory accounts, then contact us today.
