Year-end and annual accounts

Year-end accounts filed within three months, not on the deadline

Where complete records and information reach us promptly, we work to a target of having your year-end accounts done within three months of your year end. That is well inside the statutory filing deadline, and being early is the entire point rather than a tidiness preference.

Year-end accounts filed at the deadline tell you what happened up to a year ago, and by then most of what they show is already settled. Accounts done three months after the year end land while you still have most of the following year in front of you, which means the tax figure arrives with time to plan for it and any problem found is a problem you can still respond to.

It also removes the worst version of this work, which is discovering in the last fortnight before a deadline that a year of bookkeeping needs correcting first.

The opening balances nobody has checked since the first year

This is an issue we often find in a set of accounts we are taking over, and it is almost invisible because it is inherited rather than created.

Each year's opening balances come from the previous year's closing balances. That is correct, and it works perfectly until one year is wrong. After that, the error carries forward indefinitely, and every subsequent year looks internally consistent because it agrees with the year before it. Nobody queries it, because it reconciles. It just reconciles to the wrong number.

So when we take on a new client we check what the opening balances actually are rather than accepting them, particularly the control accounts. It is the only way the figures after it mean anything.

If you run a limited company

Statutory accounts, prepared and filed at Companies House, along with the review work underneath them: the bookkeeping and the year-end balances, the director and shareholder accounts where those apply, and the accounts prepared in a form the Corporation Tax return can be built from.

The director's loan account is the one that catches owner-managed companies out, because money moving between you and the company during the year is perfectly normal right up until the point where the balance and its timing start to matter. It is much easier to deal with while the year is running than to explain afterwards. The Corporation Tax return and CT600 follow from the accounts, and we prepare the two together so the figures reconcile and any tax adjustments are clearly explained.

If you are a sole trader

Annual accounts for the accounting period, with the income and the allowable business expenses reviewed rather than accepted, the bank and bookkeeping reconciled, and the profit calculated on that basis. Those accounts are then what the Self Assessment return is prepared from.

Whether a particular cost is allowable depends on the circumstances and on whether it was incurred wholly and exclusively for the purposes of the trade. Some costs are clear, some are apportioned, and some are not allowable at all however inconvenient that is. We apply those rules when preparing the accounts and explain how each cost has been treated and why, and where the position is genuinely arguable we say so.

Moving your year-end accounts to us

Where you are moving from another accountant we cannot start until the necessary handover from them has been completed. That is standard practice across the profession and it protects you, but it is worth knowing about at the start because it is a step whose timing is not in our control.

Once clearance and the handover records come through, we review what we have been given rather than assuming it is right, identify any gaps or discrepancies, and tell you what we have found before the work proper starts. If your records need work before the accounts can be prepared, that is a clean-up and we would rather quote it separately and honestly than hide it inside a year-end fee.

You sign the accounts, so you should understand them

Year-end accounts are submitted in your name and the responsibility for them is yours, whoever prepared them. Signing off a set of figures you do not understand is a risk that people take routinely because they feel awkward asking.

We would rather go through them with you. If a number in your accounts surprises you, that is worth ten minutes now rather than a question from HMRC later, and it is usually the fastest way to find something that has been coded wrongly all year.

A client whose year end turned into something more useful

A year end is meant to produce filed accounts. Occasionally it produces something better, which is a clearer idea of what to change about the way the books are kept in the first place. That is what happened with Karen, and she has agreed to be named.

Her software training was a separate piece of work that she chose to buy after the accounts were done, and it is the sequence that matters: the year end showed what was worth changing, and the training is what stopped it recurring. It is also why we would rather tell you what we found than quietly correct it and file.