25 Feb Basic accounting considerations for limited company start-ups in the UK
If you’re planning a limited company start-up, it’s a good idea to get your accounting function working from the outset.
Your limited company will have its own legal status, and that means you’ll have a legal obligation to produce annual accounts on a regular basis. Your final year accounts will need to draw upon a variety of information sources, so getting the basics right from the outset of trading will be a tremendous benefit.
Basic accounting considerations
As already stated, your final accounts for the year are a statutory requirement. Just some of the everyday accounting information you’ll need to include is listed below:
– Balance sheets, detailing all of the company’s liabilities and assets up to the end of the accounting year.
– Profit and loss accounts, with a summary of all income and expenditure for the period.
– You’ll also need to write explanatory notes giving more detail about the profits and losses and balance sheets for the period, alongside a director’s report which should offer an explanation of trading for the year and forecasts for the period ahead.
As a start-up company, you could qualify as a small business (less than 50 employees, or turnover of less than £10.2mn/balance sheet with less than £5.1mn), and this means you can submit abbreviated accounts for your business. Abbreviated accounts are simply an annual balance sheet, signed off by one of the directors. However, if you need to submit accounts to HMRC or for shareholder purposes, you’ll still need to complete official year-end accounts.
Plan your year-end accounts now
If you plan the year-end accounting process from the outset of trading, you won’t be caught unawares at the year-end. It’s a good idea to get professional accountancy support from the start, particularly when limited company accounting procedures need to be put in place. Using contemporary accounting software packages can make it easier to transmit data to your accountant, and cut costs considerably.
Your accountant will be able to give you simple tax-cutting tips and advice at the outset, and this may help ensure lower profits are shown in your final year accounts. There are lots of ways accountants can help cut the costs of your business, therefore ensuring higher levels of growth and profitability for your business over the longer term.
Take time to browse the SQK Accountancy blog to learn more about setting up your business, or give us a quick call to discuss ways our cloud accountancy service could meet your needs.