Preparing year end accounts
All companies want to break even and reach for higher grounds. Whether that’s with new products, services or better offers, you always want to grow. A good part of that is the company’s year end account. It connotes when the company’s financial period ends. It’s normal to expect some difficulty as it involves a barrage of numbers and paperwork.
These documents have to be sent within a stated period to the HMRC and Companies House. You might want to note the following tips for your year end accounts.
Planning your year end accounts
You’d feel tempted to do it all on your own but it’s best to hire an accountant. Professional advice on what to do about your expenses and tax bill will come in handy when you seek a reduction. Accounting software does a lot with some simple issues which could help you save money. Make sure to provide all the information necessary so your accountant can get going.
Know the legal requirements
There are several legal requirements to adhere to in preparing year end accounts. Such requirements include submitting your accounts to the HMRC. This is usually alongside your corporation tax return. It must take place within 12 months of the end of your company’s financial year.
The HRMC goes through your tax calculations and other documents to make sure you calculated the right amount. The statutory account also needs to be filed and submitted within 9 months at the end of the financial year.
Failure to file within the stipulated time invites penalties from the HMRC and Companies House. The penalties increase with time. Also, you’ll be incurring more costs and expenses with your tardiness. For instance, being a day late will attract a fee of £100 from the HMRC.
Keep your accounts updated
It’s vital that your accounts are up to date. It must show in every column which must be in line with your bills, invoices, receipts and bank statements. Sales made and also those not paid for should be outlined with more details in notes. Again, investments and liabilities should also be reflected whether as a relatively young startup or not.
You also need to get your expenses in order. According to the HMRC’s rules, expenses must be ‘wholly and exclusively’ for business purposes. This means that anything you get for your business forms part of the expense. Note that your employee payroll forms part of the expenses.
Since you want the year end to be as accurate as possible, try to recover all debts beforehand. Unpaid invoices are not left out either because you must record them and reconcile your accounts the right way. You don’t have to wait until the last day of the year to fill out your records and account. Things may get rather complicated. So it’s best if you have a working pattern for storing information.
To conclude, always keep good records and files of company accounts. This helps you avoid a potential build-up of problems in the long term.
Remember to contact us for all of your accountancy needs.