As an existing or a potential small business owner, you may be aware of the fact that one of your company's financial responsibilities include annual accounts. However you might be thinking, what exactly is an annual account? A summarised description would be that an annual account or company account is a collection of financial performance reports for the year. Essentially, these accounts are prepared once a year in order to file income tax returns. They consist of a balance sheet, profit and loss statement and a cash flow statement. 

Besides being compiled in order to submit tax returns, annual accounts are meant to give shareholders and other interested parties the ability to view the company's activities and financial performances. All in all, it is a very comprehensive collection of the financial records for your business. Compiling an annual account is a daunting task to achieve, even for a more experienced small business owner. 

Preparing Annual Accounts

Any good accountant will tell you that the annual account should essentially continually be compiled. With financial help such as the ones offered at Accounts Fortress, you can create healthy bookkeeping habits that will support you throughout the year. We don’t believe in going through a stressful tax season since we understand that being prepared is the key! When you have the right people in place, you can rest assured that your essential information and transactions are well documented. 

Small businesses in the UK have their own particular set of annual accounts rules, just like any industry or corporation. It pays to have a trusted, expert small business accountant on your team who knows the ins and outs of the game. This way your business can avoid missing important deadlines, compiling and submitting inaccurate reports or incurring penalty fees. Your submissions to both HMRC and Companies House can be smooth sailing when you have the right accountant on board.

Legal Requirements of Annual Accounts

A crucial aspect of small business bookkeeping is to ensure that your submissions are completed correctly and on time. You need to be aware that your financial statements are different from your normal annual accounts. To explain this a bit further, your financial statements, also known as statutory year end accounts, are sent to Companies House. The purpose of this is to give an overview of your company to anyone searching the Companies House register. In essence, the accounts demonstrate the reliability and solvency of your company. Additionally, you also must give a copy to any shareholders in your business.

Your corporation tax return to be submitted to HMRC, also has a different deadline than your financial statement with Companies House. Financial statements have to be submitted within 9 months of your business's financial year end. Furthermore, companies that satisfy the “small company” criteria set out by HMRC, only have to submit an abridged financial statement. However, full reports are still sent to HMRC along with tax returns.

Smart Bookkeeping Year-Round

The information that is presented in your annual account is in-depth, requiring detailed reports, statements and transaction history. In order to gain a full understanding of where your business is at financially, the balance sheet and profit and loss reports will need to be accurate, as well as up to date. Now, keeping track of records of your sales, expenses, tax calculations and total amounts of profit and loss can seem daunting. However, having an experienced annual accounting for a small business UK accountant to help you stay on track throughout your financial year will take the stress out of this task.

Accounts Fortress are expert small business accountants in Kent that specialize in making annual accounts easy for our clients. Our personalised touch allows your business to focus on the things that matter to you; growing your business! Let us take care of the nitty gritty, time consuming annual accounting for small business UK for you. Get in touch today to find out how we can help your business to thrive.