Many business owners get that sinking feeling when annual accounts are mentioned, but it is important to get it right to make sure you are compliant with all the rules and regulations.
Also known as financial accounts, company accounts or statutory accounts, it is a record of your business’s financial activity over the past financial period. The information in your accounts is used by HMRC to work out how much tax you owe, so it’s important to get right, both to avoid fines and to make sure you don’t over or underpay.
Purple Lime take a different approach to your accounts. Your records cover the whole year, so why wouldn’t we work with you over that whole period too? Rather than giving us a box of receipts and invoices once a year, we keep in touch over the whole 12 months, giving you the chance to keep an eye on your financial situation and get a better idea of taxes and other costs.
Working in this manner gives us plenty of time to get to know your business and spot any opportunities to help you manage your business accounts in a more cost-effective way.
Explore our annual accountancy solutions
Your annual accounts are an extremely important part of the running of your business and must be filed accurately and on time to avoid fines and further repercussions. If you have any doubts about your abilities to complete them yourself, it is well worth speaking to an accountant.
And if you want to avoid the end-of-year rush and build a relationship with your accountant which will save you time and money in the long run, Purple Lime is the accountancy firm for you.
Annual accounts production
The information you need to include in your annual accounts varies according to the size of your business. If you meet two of the following criteria, you can be classed as a small business:
- Turnover below £10.2m
- Balance sheet total below £5.1m
- 50 or less employees
Your business is a micro-entity if you meet at least two of these criteria:
- Turnover below £632,000
- Balance sheet total below £316,000
- 10 or less employees
As well as these, you can have dormant companies and limited liability partnerships (LLPs). Whatever category your business falls into, your statutory accounts needs to include a balance sheet showing the value of everything the company owns, owes and is owed, a profit and loss account showing sales, expenses and the profit or loss over the year, and various notes to the accounts. Depending on your company type, you may also need to include a director’s and auditor’s report.
If you have a small business or a micro-business, you can submit a shorter version of your accounts, but it is still critical that the information is accurate. The information you need to submit is different for every business type, and this is where a business accountant can be useful. They can go through your receipts, invoices, payroll, VAT records and all the other paperwork that needs to be included, to determine exactly what needs to go into your accounts and if there are any areas where you might be eligible to pay a reduced level of tax.
At Purple Lime, we will do this on a rolling basis across the year, so we’ll have plenty of time to spot any issues with your paperwork and opportunities to take advantage of various tax relief schemes.
Company secretarial and companies house compliance
A Company Secretary has a range of duties, including arranging AGMs and working with Board members. However, they also have important financial duties which an accountancy firm can help with.
Depending on the size of a business, a Company Secretary can have a range of duties, but one of the main roles is to file the annual accounts with Companies House to ensure a business remains compliant. This includes making sure the annual accounts are submitted correctly and on time, even if they choose someone else, such as an external accountancy firm, to do this on their behalf. If Companies House receive the details late, or if the information is incorrect, the consequences for a business can be severe, including fines of up to £5,000 or even being struck off the register.
As a small business, it can be hard to find the right person to take on the role. Passing these duties on to your accountant means you can be assured of a high level attention to detail and an awareness of the most recent requirements, often at a lower cost than employing a member of staff to fulfil the same role.