Are you looking to borrow or invest money? The accounts preparation is a vital part of the accounting system following your financial year end. For Incorporated organisations, it is a necessity required by HMRC and Companies House. For Sole traders and partnership, it is a compliment and confirmation following the submission of the tax return.
Unlike Management Accounts, Accounts Preparation following a company’s year end tells the story of the financial activity that has passed. For sole traders and partnerships, the financial statements compliment the tax return although the profit as per financial statements may differ from the taxable profit due to extra capital allowances allowed and the addition to the profit of expenses that may not be allowable for tax.
Incorporated businesses, CICs, CASCs and Charities are required by UK law to submit their financial statements to Companies House and HMRC in a certain format and must be prepared in line with GAAP. Please refer to our Jargon buster page for an explanation of these abbreviations.
Why is Accounts Preparation important?
Accounts preparation is important because it deals with adjustments made to the bookkeeping that may not necessarily be reflected in this accounting procedure at the beginning. The adjustments usually enhance or diminish the final outcome of the financial activity and financial position at the year end.
Do I need Final Accounts?
If you are an incorporated business, CIC, CASC or Charity then the simple answer is yes. It is a requirement of UK law. For sole traders and partnerships, it is good practice and should any lenders, investors or a potential buyer of the business wish to see accounts, they are readily available. It is also good practice to have these in case you ever want to incorporate at a later date so that goodwill can correctly be calculated.
At 1 For All Accounting, the Angels can help you:
We will prepare your final accounts without delay and liaise with you on a regular basis. We will continue to be proactive and have your best interests at heart whilst maintaining our ethics and professional attitude.