Preparation and filing of Limited Company Accounts/Corporation Tax Returns
About Computerised Accounting Systems (Cloud Based Accounting)
Limited companies in the UK are required to prepare annual accounts, also known as statutory accounts, to report their financial performance.
Steps in Preparing Accounts:
- Bookkeeping: Maintain accurate and up-to-date records of all financial transactions, including sales, purchases, expenses, and payments. Use accounting software to streamline this process.
- Trial Balance Preparation: Compile a trial balance from your ledger accounts to ensure that the total debits equal the total credits. This helps in detecting any discrepancies.
- Adjusting Entries: Make necessary adjustments for accruals, prepayments, depreciation, and other adjustments to align with the matching principle and accrual accounting.
- Drafting Financial Statements:
- Income Statement (Profit and Loss Account): Shows the company’s revenue, costs, and profit or loss over the financial year.
- Balance Sheet: Displays the company’s assets, liabilities, and shareholders’ equity at the end of the financial year.
- Cash Flow Statement (if applicable): Reflects the cash inflows and outflows during the period.
- Notes to the Accounts: Provide detailed information on accounting policies and specific figures in the financial statements.
- Directors’ Report: A summary report prepared by the company’s directors highlighting the company’s performance, principal activities, and future outlook.
- Confirmation Statement: This is not part of the accounts but is required annually to confirm the company’s details.
Key Considerations:
- Accounting Standards: Use the relevant accounting standards, such as the UK GAAP or International Financial Reporting Standards (IFRS), as applicable to your company.
- Audit Requirement: Determine if your company requires an audit. Generally, small companies may be exempt, but medium and large companies need to have their accounts audited.