Why An Accountant Needs So Much Information To Prepare Annual Accounts For A Limited Company
Preparing and filing your annual accounts is no small job. It’s also probably one of the most important things you’ll have to do as a director of a limited company. Your accountant needs to get all the information they need in order to file the annual accounts on time. If you’re not organised enough to provide this information to your accountant on time, you may risk missing crucial filing deadlines for your accounts. In this article, we look at why an accountant needs so much information and how you can help them by getting organised in advance. If you want to know what information your accountant may need to prepare annual accounts, check out our other article.
Your business means a lot to you, and the way you manage your finances can have a huge impact on how successful your business is. At Joanna Bookkeeping, we understand how important it is to have good financial management in place. That’s why we work with business owners just like you all over the UK to help ensure that they’re prepared for your accounting responsibilities.
Before we dive into this article, it’s important to mention that as per UK law, it’s not an accountant’s responsibility to produce and submit annual accounts to Companies House. The director(s) who is responsible for submitting the accounts needs to ensure that they submit the correct documents to Companies House. It’s one of many legal responsibilities that directors have. You can, however, outsoure the work to a professional accountant who will assist you with the annual accounts preparation.
So, let’s get into it…Why does an accountant need so much information?
Your Accountant Needs to get to know you and your business
If you’re working with an accountant for the first time and they’re doing the annual accounts for your limited company for the first time, the number of questions will likely be higher. This is because they don’t know your business yet. Ideally, this would change over time as your accountant has a much more familiar relationship with you and your limited company, but it also depends on:
- your industry,
- the nature of your transactions,
- how risky your industry is, etc.
Plus, if you have a number of irregular transactions, this will raise more questions due to the unfamiliarity of your accountant with your books. So not every business will be asked the same number of questions by their accountant.
Meeting accounting standards
Annual Accounts can’t be prepared using pure assumptions made by an accountant. They have to be a true and fair representation of your business’s financial situation at the year-end, therefore, an accountant must ask the necessary questions. Accountants work in a professional capacity and have to meet accounting standards, and because there’s more than one type of standard when it comes to accounting and preparing your annual accounts, your accountant may have further questions to make sure they apply the correct standard to your transactions. Accountants use their knowledge of accounting and tax but they need information about your business from you to be able to correctly apply this knowledge.
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Fraud and monitoring money-Laundering
Accountants have a professional responsibility to monitor transactions for any potential fraud and money laundering activity, so they may need extra clarification about certain things. Some industries will be at a higher risk, so this can raise more questions from your accountant. This is the same with the banks where they have to ask about certain things and transactions.
We get it…bookkeeping may not be your strong point, but you’re not alone! That’s why most limited companies hire a bookkeeper to help them with day-to-day bookkeeping.
If you’re not on top of your bookkeeping or if you’re not very organised with your records, you will more than likely face even more questions from an accountant as they navigate their way through your records. It’s always best practice to stay organised with your bookkeeping and to work with an accountant who can always keep you on the right path, ensuring that missing information is not an issue when filing your annual accounts.
Do you feel like you have a little more clarity as to why an accountant needs so much information to prepare annual accounts for a limited company?
Joanna Bookkeeping is a professional accounting practice based in Oxford, UK, helping limited companies of all shapes and sizes maximise their potential via effective accounting and bookkeeping services. And, because we’re fully digital, we offer services to businesses all over the UK! Have a chat with our Oxford accountant today.
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