Year End Accounts
Fortuous can assist you whether you want the most basic form of profit and loss account and balance sheet through to highly bespoke management accounts, financial projection or other forms of measuring, monitoring and reporting to keep your business healthy and well managed.
SME business clients generally have the starting point of asking what accounts do they have to prepare and have?
The answer is all companies, with the exception of dormant and ‘small’ companies, must prepare full annual accounts every year for Companies House and HMRC.
Regardless of the statutory compliance requirements for preparing and filing company accounts, there are obvious reasons why directors and shareholders should want to have accurate and up-to-date accounts and information.
The vast majority of UK companies are small businesses under the HMRC definition, which is to satisfy 2 out of 3 of:
• A turnover of £10.2 million or less;
• £5.1 million or less on its balance sheet;
• 50 employees or less
Small companies under the above definition now only need to annually file a balance sheet signed by a director and supporting notes. There is a further sub-category of micro business which are smaller but the requirements are broadly similar.
What are statutory accounts?
Statutory accounts are an important part of running your business so that your shareholders see how your company is performing and to keep your records updated with Companies House.
More commonly referred to as annual accounts, there are a number of important figures you must include and if you know what to look out for you could even check up on how your competitors are doing.
A company accounts must include a balance sheet, notes, a profit and loss account, cashflow statement and a directors’ report.
Your first accounts need to be filed 21 months after registration with Companies House.
After that you need to file nine months after your company’s financial year ends.
If you file late you could be fined up to £1,500 depending on how long the delay is.
Understanding Company Accounts
It’s one thing getting your accounts prepared by an accountant or bookkeeper and another thing understanding the figures put together. Businesses that are well run, stable and successful also tend to keep a close watch on the financials and this doesn’t just mean how much money is coming in, although that’s always welcome if healthy.
Aside from a basic profit and loss summary, company accounts can provide many other measures of success, efficiency and/or inefficiency or warning signs of trouble ahead. This is why understanding your company accounts is so important.
Our approach is to offer advice and training to all our clients in understanding financial concepts and reports and the software now generally used to record information.
What about the profit & loss account?
Even though the statutory obligation for small companies is balance sheet only, you really can’t prepare a balance sheet without also having a profit and loss account first.
A Profit and Loss account is a basic trading summary – how much has been sold and how much has been spent running the company.
Adjustments from profit and loss to final company accounts
The profit and loss statement will get adjusted to reflect other financial and/or tax related aspects which involves a Cash Flow statement and Balance Sheet.
Draft year end accounts for approval
Once the data is collected, our Accounting team is normally able to produce a set of draft statutory accounts for your approval within a week, including calculating your corporation tax liability. By tackling the accounts process shortly after the financial year end and working through the corporation tax calculation in the same time frame, this allows you to budget for and build the payment into your cash flow model.
We know it’s a difficult decision choosing an accountant and you’ve probably got some questions you want to ask. So below are the answers to the questions we get asked the most (just click on the heading to see the answer). If your question isn’t here, just email us at firstname.lastname@example.org and we’ll get back to you with an answer.
Question: Will you come to visit us for an initial consultation?
Answer: Yes. It often helps to see your business, books and records, etc at first hand and we are always happy to invest our time without charge to show you what we can do. Of course, if you prefer to visit us, that’s fine too.
Question: When and how soon can you come to see us?
Answer: When’s good for you? Let us know and we’ll do our utmost to help. If you need to see somebody urgently, we’re always out and about and can arrange to see you very quickly.
Question: I’ve just had my accounts done and don’t need an accountant until next year, so is there any need to contact you now?
Answer: We can’t over emphasize the importance of tax planning at an early stage, not crisis driven advice. Ideally you do tax planning before the year even starts but after that, the earlier the better. The same is applicable to all areas of advice and we are about helping you change the future, not just reporting what has already happened.
Question: Can I ask accountancy questions without being billed?
Answer: Yes. You won’t be billed for asking accounts, tax or any question for that matter. I understand that you may want to check something relating to your business accounts and need an answer quickly. We aim to respond with answers to your accounts queries promptly.
Question: Do you bill by the Hour?
Answer: No we don’t. WeI use fixed fees which will be determined before the work is undertaken. We are open with prices for company accounts, tax returns and I like to agree these fees upfront before the work is started. You can check yourself here by obtaining an instant quote.
Question: Is it important to use Qualified and chartered accountants?
Answer: Yes it is. We are regulated by a professional body (ACCA) and comply with certain standards and have undertaken a rigorous training program to achieve my accountancy qualifications. WeI know what we are doing and have the best experience and training to provide the best accountancy and business advice. When you use someone who isn’t qualified, you take a risk and it can prove to be expensive in the long term.
Question: Are you up to date with recent accounting regulations and industry changes?
Answer: Yes. We regularly maintain my CPD (Continuing Professional Development) and it is a requirement of regulatory body the ACCA.
Question: Are you able to take care of all of my accounting needs?
Answer: Yes. we can do the whole lot, including bookkeeping, payroll, VAT returns and year end compliance. we are also able to provide management accounts and business consultancy if this is needed.
Question: How long do I need to keep my accounting records?
Answer: You need to keep your accounting records for 6 years.
Question: What Accountancy software is the best?
Answer: There are a lot of accountancy software available and most of them have similar functions. we can advise on what is most suited to your business and discuss the pros and cons of each. It is best to have these discussions early, as it can be difficult to change over once you have started using one. It can also be costly to the business if the accountancy software isn’t right.
Question: Should my business be using cloud accounting software?
Answer: A lot of businesses are now considering cloud accounting software as an option. We can advise and support you in making the right decision. We work with most online cloud accounting software providers so know what is available and the pros and cons of each.
Question: Should I be prepared in case HMRC wants to audit my records?
Answer: They may want to inspect your accounting records at any time. The number of investigations has increased dramatically since there has been the need to claw back more income tax receipts, and they have the power to interrogate your accounts going back over a number of years. You should be keeping your business accounts and tax records for at least 6 years, and the more organised they are the better.
Question: How easy it is to change accountants?
Answer: Switching accountants is easy and straight-forward. It’s usually a case of writing to your current accountant. Informing them the name of your new accountants. Advising them that the new firm will be contacting them shortly to collect your records. We have the templates ready and can share with you.
When you decide to switch to us, we will manage the transition and ensure that the handover is seamless. We will take care of everything. Including contacting your current accountant and explaining you are moving away. Drafting a brief note confirming the move. Arranging for the transfer of records. Obtaining copies of your accounts and tax computations. And notifying HMRC and other government offices that we are looking after your business affairs.
Question: What does ACCA mean?
Answer: This is the Association of Chartered Certified Accountants. It is an internationally recognised professional accounting qualification. This can only be attained following the successful completion of 14 professional examinations. To become a full member of the ACCA, you have to have completed at least 3 years of relevant practical experience in many areas of general practice.
Question: Can I be your client, irrelevant of the location in UK?
Answer: Absolutely, we although based in Ilford, Hainault, Hainault Business park, Essex but our clients come from different parts of the country. Not a lot of them come and visit us face to face. Most of them are using phone and zoom and emails. We do not mind, what communication method you choose, our aim is to deliver the best service you can imagine.