Office Assistants (www.officeassistants.org)
The Small Business Submission
If your turnover is less than £25.9 million, you only have to submit a Director’s Report and a Balance Sheet. If you are fortunate enough to have passed that turnover milestone, the requirements are a little more onerous; you also need a Profit and Loss Report – covering sales income, expenses and other costs, and your profit or loss for the year – and explanatory notes with extra details about items in the accounts. The format of the submission should comply with UK accounting standards and the headings specified in the Companies Act.
The Records you Must Keep
Regulations also stipulate that you must keep records to back up the accounts for a number of years. These include your bank statements, cheque and paying in books, confirmation of internet payments; invoices for purchases and copies of sales invoices; PAYE records for employees if any, and for directors; VAT records if you are registered, a list of fixed assets with date of acquisition and depreciation applied; any stock held at the year-end and/or the value of work in progress not yet invoiced at the year end.
It is therefore necessary to do a careful stocktake on your year-end date, and to work out its value at the lowest figure between the cost of buying it in or producing it, and the sales revenue you expect to receive from it. If you are a service company you should work out the percentage of work already completed on specific projects which will be billed on completion so that you can accrue a reasonably accurate percentage of that figure.
You need a list of outstanding debtors and creditors, noting any bad debts that you may not be able to recover. Also record any disputed invoices from suppliers.
Making the Most of all This Activity
Depending on your relationship with outsourced bookkeepers, they may prepare all this for you automatically. Still, it’s worth checking with them whether you would gain any tax or other benefits from doing anything else before your year end to bring things into the accounting period.
This is also a really good opportunity to take a hard look at your business practices and make sure you are not wasting time or money, or missing opportunities to save them. Contact Office Assistants (http://www.officeassistants.org) for more advice about getting your annual accounts ready or for help with any other accounting queries.