What are Year End Accounts?
Year End accounts are often seen as a necessary evil by business owners. They are a statutory requirement, and many people see their primary purpose in providing a starting point for a tax calculation.
We won’t argue any of that, but we would add to it!
The process of preparing year end accounts starts with the quality of the record keeping throughout the year. If it’s accurate and consistent the year end process is far simpler.
Before the year end arrives, there are key steps that can be taken to reduce profits within the business, and from there, to reduce the tax burden. Care is needed here to ensure that any future finance requirement or investment plans won’t be adversely affected.
Similarly, through careful planning in the run-up to the year end the profit figure shown in the accounts is maximised. This is particularly important if it is known in advance that the accounts are to be used as part of a finance application in the near future. This will of course affect any tax liability, so care is needed to balance the two!
As the year end accounts are prepared, and we go through our processes, we can identify ways the bookkeeping can be streamlined, or can suggest modifications to the business that can improve profits.
Our review meeting to discuss the accounts will always include an update around the performance of the business since the year end, and the goals for the coming year, so the accounts under consideration often provide information that can be useful in looking forwards.
Prompt preparation and submission of your accounts can also be beneficial if a finance application is looking likely. Lenders will look at management accounts, but primarily at year end figures, so if your position has improved dramatically, it’s a good idea to get the stronger accounts submitted as quickly as possible so that improvement can be seen. This will usually improve the credit rating for the business.
This isn’t an exhaustive list, but hopefully indicates that year end accounts can be more valuable than you may have first thought!
If you’d like to know more about the year end accounts service we offer please take a look at our associated services page or get in touch. We’re here to help you make the most of the year end accounts process!
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