It turns out to be a rewarding experience when you are carrying out your own business in an efficient way. However, if the operating system is not well prepared, running a business can be a very stressful journey. If you aim to pursue the dream of a successful business, you have to comply with the legislation and file company accounts promptly and in an efficient way. In the UK, it is legally required that all limited companies have to file annual accounts. Moreover, this legal requirement has to be fulfilled every year and the companies have to consider the tax returns as well. However, this is a challenging task to file company accounts every year and takes a lot of effort, however, if you are unable to do it on time, you will have to face serious consequences.
This will make you pay late file penalties and fines. As keeping the company accounts on top of priorities is quite time-consuming. This is why several companies find it advisable to hire expert accountants to deal with this matter and handle the process professionally. If you are a beginner in the business world, there are chances of wondering about several queries. This could include what are annual accounts to be exact, what is included in the company accounts, how to file company accounts etc. You need to stop worrying as this guide will help you to develop an understanding of company accounts and how to file them in an error-free manner.
What are Company Annual Accounts
Company annual accounts refer to the financial activity of an organisation. This is observed for the whole financial year. The information generally focuses on the details of financial performance, the operating performance of the company, and the company transactions. The other terms that we use for annual accounts are financial accounts, statutory accounts, and company accounts. Be assured that if you find out any of such terms in the discussion, this will mean the same. You need to be clear in the process of developing the understanding.
Moreover, it is required from the limited companies that they ensure to supply company accounts to multiple places. This includes the following:
- Companies House
- HM Revenue and Customs (HMRC)
- The attendants of general meetings
- The individuals who hold the company’s debentures
- Shareholders of the company
What Comes Under A Company’s Annual Accounts?
The annual accounts aim to depict the financial position of the company. This includes the details of equity, assets, liabilities, expenses, and income. Mostly annual accounts tend to cover the following listed factors about the business:
- Auditor’s report about the company
- Director’s report about the company
- The details and important notes of the accounts
- The balance sheet
- The details of profit and loss accounts
Furthermore, you wish to keep your company’s annual accounts complete. To make this possible, you will be required to maintain the details of accounts records and financial records for the whole financial year of the company. This is vital to know what exactly is required by the companies house. The required list by the companies house includes the following listed details:
- In this case, if any kind of money is owed to your business, maintain a clear record of it.
- Bank statement
- The agreements of lease
- The details of the agreement of all the loans
- All the company assets with relevant details
- Liabilities of the company
- A record of the details about the products and services purchased or sold out
- All business expenses including outgoing expenses
- All the income that is received during the financial year
How to File Company Accounts
The most popular method among limited companies to file company accounts is to use the online medium. Also, all the companies do that. However, there is an option of doing your accounts manually in paper form. It takes a long period to do the process in paper form. HMRC also takes a little longer to complete the process through this medium. Annual accounts should be submitted to the companies house. Whereas your yearly tax return will be under the dealing of HMRC.
You are required to use the online medium to submit tax returns to HMRC. There are exceptions for the ones who come up with valid reasons and excuses. In the case of micro-entities and small companies, CATO (company accounts and tax online service) is a practical medium to submit your annual accounts. This will be submitted to companies house and HMRC as well. This process is such a simple and easy process that you can complete it on your own. This means you can easily file your accounts yourself if you are associated with a small company or a micro entity.
The Bottom Line
Now that you have gathered a fair amount of information about how I file company accounts, we can bring the discussion toward wrapping up. We can say that filing company accounts are an integral part of the process. It is quite challenging to maintain the record throughout the financial year, due to which the companies tend to hire accountants for this purpose.
This will keep them protected from late filing penalties and doing the accounts in an error-free manner. However, the process of filing the company accounts is a little easier and can be done on your own if you are running a small company or a micro entity. We hope this guide has helped you to develop a better understanding and you will be able to handle your company accounts more efficiently.
Disclaimer: The general information provided in this blog about how I file company accounts includes its text and graphics. It does not intend to disregard any of the professional advice.