There are many company houses registering financial data accounts of companies that are present within their vicinities. These accounts have to be filed with these registration houses at the end of each year. Under this rule, the registered companies are required to supply financial summaries of their annual performance to these company houses. Apart from the performance, snapshot of the balance sheets is also provided for the concerned period.
What is meant by a Trading Year?
In most cases, the trading period is based on one year duration. The year either ends on the 31st of December (the calendar year) or on the 31st of March (the tax year). The information that is to be revealed by the companies before the company houses depends on the size of those particular companies. Smaller companies are required to show limited information as compared to the larger companies.
The Chief Reason Why Companies Have to File Their Company Accounts
The main reason why companies are required to file their accounts under company law is that the owners or shareholders of a company have limited liability. Their shareholding limits the liability for their debt of their company. This makes it possible for the investors to risk their capital without the fear of losing their personal assets if the investment bears loss. Thus, this method is conducted to have transparent details of how companies are moving.
Main Financial Statements to be provided by Company Accountants
Following are the three main financial statements that are to be provided by accountants:
The balance sheet: The balance sheet provides a detailed description of financial status of the company during a trading year.
Profit and Loss Account: The profit and loss account is also required to be presented. This is produced as an evidence for profit and loss made by the business during a trading year.
Cash Flow Statement: This statement shows the inflows and outflows of cash to the business during a specific trading year.
How Accountant Companies can Help You Manage Your Financial Data
Providing cash flow statements; balance sheets; and profit and loss account details require advanced understanding of accounts. Company accounts should be handled with care, to avoid any errors in the data. One best way to manage the accounts and avoid errors in the data is to receive assistance from an accounting firm that can provide guidance on all this. There are many companies offering services such as tax consultation; abbreviated accounts; tax advice; Ltd and LLP company formation; VAT registration and others. To make your business successful, try to find a reliable registration house that offers the listed services. Make sure that the company house you choose for your business registration offers these services.
