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. Cashflow and profit are the lifeblood of every business.
Accounting deals with the recording of a company’s financial transactions. Accounting is one of the most important factors that make a business run, and it is essential for you to know why accounting is the life blood of any business. If this part of a company is not orderly, it should be expected that the business is not running as effective as it should.
Bookkeeping, on the other hand, is all about recording a company’s economic activities. The entries are summarized periodically. It was called “bookkeeping” because before the computers were born, these were recorded in actual books. But now, transactions are recorded electronically.
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.
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.
Shortly after the end of your tax year, our Business Consultants will help you collect the information our Accountants need to prepare your annual statutory accounts. We are happy to work with your own bookkeeping records (often in excel) or you might prefer us to prepare the data from original invoices and bank statements.
Our range of specialised services includes:
Setting up payroll and monitoring systems
Accurate and complete bookkeeping services
Management of accounts payables and receivables
Development of year-end reports for auditing
Development of monthly income reports and statements
Inventory database development and management
Accounts receivables and payables reconciliations
Budget monitoring, managing, and reporting
Regular client invoicing
Monitoring, budgeting, and management of petty cash accounts