Each year, companies need to complete annual accounts and copies of these accounts need to be sent to a number of different parties. These include HMRC, Companies House and shareholders. Although extremely important, not many businesses look forward to this task. In fact, each and every year, thousands of companies are fined due to submitting this information after the deadline. Any fines incurred due to late submission is just wasted money that could have been invested into the business. The best way to get ready for end of year accounts and avoid missing the deadline is through preparation.
Deadlines
The deadline at which limited companies have their year end is different for each company. For example, a company will send their first accounts to Companies House, 21 months after their registration date. After this, businesses will file subsequent annual accounts, 9 months after the end of your financial year.
When it comes to HMRC, there are even more deadlines to keep on top of. A business will pay their corporation tax to HMRC, 9 months and 1 day after the end of their accounting period. They will also file their company tax return with HMRC, 12 months after the end of their accounting period.
This may seem confusing at first but with time and experience, understanding these deadlines will become easier. It may also be helpful to utilise the help and guidance of a trained professional such as an accountant.
Plan Ahead
One of the reasons why many businesses become particularly stressed around the time of end of year accounts is because they’ve left so much work until the last minute. This puts pressure on the company as a whole, including employees who then have to work against the clock. Therefore, preparing for these accounts well ahead of time doesn’t just ensure that you meet your deadline, it also gives the business and your staff much needed breathing room.
When it comes to year end accounts, you should be preparing at least a month in advance, however the more time, the better. This gives you and your staff the much-needed time to chase up documentation and complete the relevant processes.
Invoices
Prior to submitting your accounts, it’s important to look at the past year’s financials and ensure that all work has been invoiced and all of these invoices have been paid. This will involve checking all relevant records and following up with any unpaid invoices. This can be a tricky area but in most cases customers will often make their payment after a gentle reminder. However, when a client refuses to pay, it’s at this point that a company should look at utilising the help of a collection’s agency.
Remember that most customers want to pay in full and in some instances, a long-term payment plan may be the best option for both parties. Try to remain respectful and understanding as this will ensure you don’t alienate your customers.
Housekeeping
Much of the preparation for annual accounts is general business and financial housekeeping, ensuring that everything is in order. This can include organising relevant documentation, such as financial records, receipts, credit card information, payroll records etc. It’s also a good time to ensure that your records match up with your bank accounts, which involves cross referencing and making adjustment, if and when necessary.
Another important part of housekeeping is finalising expenses. Remember, any work expenses that you have made will help to reduce the taxes that you pay. This is particularly important when it comes to high ticket items. Cataloguing evidence of expenses throughout the year will pay dividends when it comes to submitting tax records.
Help
Getting ready for the end of year accounts can be confusing, frustrating and stressful. It’s for this reason that many businesses choose to get help from a third-party. The experts at Fundflow have many years of experience in accountancy, including end of year accounts. They offer invaluable advice and services, ensuring that the process is easier and always works in your best interest.
For more information click here – Accounting year end – Fund Flow
