LOCAL ACCOUNTANTS
by Applegate Accountants, Cheshire

Management and Financial accounts

Call us now for Business start up support Our local base working with businesses as accountants in Cheshire helps us realise businesses are different, but need the two types of accounting information - management accounts and financial accounts for success.

Financial accounts have to be filed at Companies House and describe the performance of your business. They are a statutory requirement that limited companies are legally bound to produce. To run your business, management accounts are much more useful, they help you to plan your business and make decisions about key areas like margins sales, and stock.

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Financial accounts

Financial accounts provide a record of your business' performance over the past year - for the benefit of external users such as, bankers, tax authorities, shareholders, employees and suppliers. Financial accounts normally include the following elements.

The following Definitions may help – if in dobt contact Appelgate Accountants, Cheshire for a free consultation.

Profit and loss account - It compares income against the cost of goods or services and expenses incurred in earning that revenue.

Cashflow statement - A cashflow statement is not the same as a cashflow forecast, The Cashflow Forecast predicts the expected rises and falls in cashflow over the coming year. A cashflow statement shows how your business has generated and disposed of its funds during the period.

Statement of recognised gains and losses - This records all gains and losses since the previous set of accounts.

Balance sheet - This is a snapshot of your business' assets and your liabilities at a particular time- eg the end of your financial year.

Unincorporated businesses - Unincorporated businesses (such as sole traders and partnerships) do not need to produce financial accounts. They need only maintain proper books and records. These must be kept for a minimum of six years.

Filing financial accounts

Limited companies are obliged by law to prepare a set of financial accounts each year. These must be filed with Companies House, within 22 months of your business' formation, and thereafter within ten months of each financial year-end.

There are statutory penalties for late or incorrect filing, for which the directors are liable.

Management accounting

Management accounts will enable you to better manage your resources, and help you identify business trends, see how you are meeting your targets, and highlight spending variations. The are a key part of record keeping, recording, measuring and producing internal reports. They allow for Planning and control of stocks, cash, expenses. They help with control and monitoring of strategy and performance. They are second to non as a decision making tool providing cost information for pricing, capital investment and marketing and evaluating the financial effect of strategies and plans.

LOCAL ACCOUNTANTS by Applegate Accountants, Cheshire

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LOCAL ACCOUNTANTS
by Applegate Accountants, Cheshire