Preparing Annual Accounts for Limited Companies in the United Kingdom |
Posted: August 10, 2020 |
When dealing with annual statutory accounts for a company, it is important to note that these are legal requirements that must be fulfilled. Statutory accounts offer a breakdown of financial records that are to be sent to shareholders of the company and other entities that are tied along with it. The issue here is that these can often become a very complicated task depending on the size of the enterprise, so dealing with a limited company that is large will be daunting. Here are some pointers to consider when filing for statutory accounting. However, bear in mind that the government has its own guidelines and procedures, which are to be followed rather than using this article: Preparing the statutory accounts:Each financial year, companies are required to submit to their members a copy of their statements on cash flows, expenses, and other related items such as taxes and the like. Be aware that late filings of reports are laced with penalties that range to up to £1,500, which is something that no business wants to deal with. These accounts include what is called a “balance sheet”, which shows all the assets of the company, cash flows, debts and money lent, as well as statements for profit and loss. These show the company’s total sales, costs for running the business, and any assets or liabilities generated throughout the financial year. Your business may also need to include a director’s report and an auditor’s report depending on its size. Small companies normally send simpler accountsSmall businesses and other businesses known as micro-entities usually do not require auditing. This is determined by the numbers on the balance sheet. If the number of turnovers ends up less than £10.2 million or has a value of less than £5.1 million on the balance sheet with a staff of fewer than 50 employees, this counts as a small enterprise. Micro-entities have a turnover of £632,000 or less, £316,000 or less on their balance sheet, and employ less than 10 employees. These companies can be exempt from auditing and have the choice of whether or not they want to send a director’s report and a profit and loss statement. The smallest form of business entity can choose to send its balance sheet on its own. Are these accounts easily prepared by oneself?You can definitely choose to take on this burdensome task for your company along with the annual accounts management, but the question is, why? Not only does it take away precious time you could be using to run the business, but it is also known that services such as hired accountants exist to do these for business entities. Also, dealing with money is usually done on the dot, and any mistakes can be costly with severe penalties. If you have no experience with accounting and money management, the best move is to hire someone who knows how to do these things properly and efficiently. This can take away a lot of the stress dealing with large numbers brings with it, and can help you work around the legal requirements without overstepping the boundaries of the law. Do note that despite the use of accountants, company directors are still responsible for double-checking statements for accuracy before they are submitted. ConclusionDealing with large sums of money is often intimidating because making any calculation mistakes can be grave to your company. Oftentimes, having an accountant hired all year round for your company can just be an added expense, which is why many companies have opted to hire services when needed annually. These accountants are often experts in their field and are trained to handle money accounts better than you or any of your staff. When it comes to the best tax accountants in London, you can’t go wrong with our services at Accotax. Book your next account management with us for top-tier results!
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