Expert Guide: How to Prepare Statutory Accounts
Who can prepare statutory accounts
All limited companies in the UK are required to prepare annual accounts – also known as statutory accounts – at the end of their financial year.
In our expert guide, ‘How to file annual accounts’, we will provide essential information about statutory accounts, including:
- What are annual accounts
- What is included in statutory accounts
- When are annual accounts due
- How to prepare annual accounts
- Who can prepare statutory accounts
- Why it’s important to engage an accounting expert
1. What are annual accounts?
Statutory accounts provide an insight into a company’s financial position and performance for a specific financial year. Your annual accounts must be prepared and then filed with Companies House.
Your statutory accounts must be compliant with UK regulations – namely the Companies Act 2006 – as well as relevant accounting standards, depending on the size and structure of your company.
Annual accounts are used by a range of stakeholders – from customers, suppliers and shareholders to creditors and lenders. Because they provide an insight of the company’s current and future financial health, it is essential that they are prepared in an accurate, timely and compliant manner.
2. What is included in statutory accounts?
Preparing annual accounts typically involves the following components:
- Balance Sheet also known as Statement of Financial Position
Displaying assets, liabilities and equity at the end of the financial year
- Income Statement also known as Profit and Loss Account
A record of the company’s income, expenses and profit or loss for the financial year in question.
- Cash Flow Statement
The inbound and outbound flow of cash across the financial year.
- Notes to the Financial Statements
Additional notes provide extra details on financial position and performance.
- Auditors’ Report
- The opinion of a qualified auditor provides assurance to shareholders and other stakeholders about the reliability of the information.
- Directors’ Report
A commentary on financial performance and overall outlook.
What is included in statutory accounts may vary, depending on the regulatory framework applicable to the company in question. This is why it is important to seek professional support so that you are compliant.
3. When are statutory accounts due?
The deadline for preparing annual accounts to be filed with Companies House is nine months after the end of your company’s financial year.
If your company does not manage to submit its accounts to Companies House on time, you could face a late filing penalty. The size of fine will vary, depending on whether you are a private or public company as well as how late you file.
Persistent late filing can result in legal consequences, such as prosecution, as well as reputational damage, which could impact on future relationships with clients, investors, suppliers and lenders.
4. How to prepare annual accounts
The first stage of preparing annual accounts is gathering all relevant financial information, including bank statements, invoices, payroll information and other supporting documents.
You must then review your financial data – from revenue and expenses to assets and liabilities – and perform any necessary reconciliations.
At this point you’ll need to engage a reputable accounting or auditing professional to take care of the preparations. They may require additional detail from you, such as items or transactions that need disclosure.
Once complete, you will need to review each component that will be submitted. The accounts can then be filed with Companies House.
5. Who can prepare statutory accounts?
Annual accounts can be prepared by the following professionals:
Accounting Firms
Reputable firms like ours provide a broad range of accounting services by qualified accountants. Our business services team specialises in preparing statutory accounts, financial reporting, tax compliance and auditing
Chartered Accountants
With qualifications such as the Associate Chartered Accountant (ACA) or Fellow Chartered Accountant (FCA) from the Institute of Chartered Accountants in England and Wales (ICAEW)
Certified Public Accountants
CPAs are certified by relevant professional bodies such as the Association of Chartered Certified Accountants (ACCA) or the Institute of Chartered Accountants of Scotland (ICAS)
Registered Auditors
Regulated by authorities such as the Financial Reporting Council (FRC) or the Institute of Chartered Accountants in England and Wales (ICAEW)
Company Secretaries
Since they are often qualified accountants, or have professional experience, company secretaries can prepare annual accounts.
Ultimately, you should entrust your statutory accounts to someone who has the professional expertise to ensure accuracy and compliance with company law and other regulations.
6. The importance of engaging a reputable accountant
Financial accounts and tax calculations can be complex, with numerous regulations to adhere to. It is vital that you appoint a reliable accountancy firm for this important activity.
When it comes to preparing statutory accounts we offer the benefit of:
1. Knowledge
Our experienced accountants have a wealth of expertise in compliance and tax law and will work efficiently to prepare your statutory return.
2. Accuracy
We work hard to prepare error-free annual accounts
3. Strategic expertise
Your annual accounts provide valuable insights into your company’s financial prospects. We can interpret complex financial data which can help with planning for future growth, including strategic suggestions. When you present solid evidence of your financial position, it can secure funding or investment to help you expand and flourish.
4. Cost-effectiveness
While we ensure that your return is on time and avoids penalties, we can also assist with tax relief and other solutions to minimise your liabilities and save you money.
5. Efficiency
We get on with the complex job, leaving you and your team free to focus on your company’s daily operations.
Please click to find out more about our annual accounts services.
Contact the annual report and accounts experts
As discussed, it is imperative that you appoint a trustworthy expert to prepare and file your annual accounts.
As well as peace of mind, an accounting professional can legitimately help minimise your tax liabilities, support you in making informed decisions and ultimately help your business to grow.
For all enquiries about how to prepare statutory accounts, please call us today:
Wimbledon office: 020 8946 1212
Brighton office: 01273 202311