Company accounts – a bad thing or blessing?

Of all the things you need to do when running your own business, company accounts are usually the one thing that people really struggle with - after all, they take your attention away from doing the things that you really enjoy. However, while it's accepted that it's a necessary evil, have you ever considered all of the benefits of keeping good financial records?

Do I legally have to keep company accounts?
The act of maintaining proper company accounts isn't a legal requirement for everyone, but it's vital that you know when it is. Not everyone is required to keep company accounts; if you're self-employed it's not a legal obligation, but if your company is limited then there's no getting away from it. This legal responsibility also concerns partnerships that consist of several companies, when one or more of them are limited.

While the above may be true though, any accountant worth their weight will advise you to keep accounts regardless of your legal position. Every business or freelancer has to file a tax return at the end of the financial year, and keeping proper accounts makes this job a whole lot easier than sorting through everything at the last minute. You can make it even easier still, by using an accountant to do this for you; for a fixed fee they will usually update your accounts on a monthly basis and complete your return too, taking the pressure off of you.

Your accountant can ensure that you benefit from their help
Even if you're self-employed, your accountant can make sure that you benefit from their help and from keeping official records. If you work with an accountant, they will be able to use your financial records to offer relevant business advice, including growth strategies and expenditure reduction. By keeping on top of your company accounts, your accountant will be able to advise strategies to reduce liabilities and boost your profits.

Your accountant will also tell you that these official records can also help you with other non-work related issues. When you buy a property and need a mortgage or if you want to grow your business and take out a loan to help you, you're at an immediate disadvantage if you're not in permanent employment. Generally speaking, you'll need to show at least three years of accounts for a bank or building society to even think about handing over the cash, so having professional company accounts to show them is imperative.

Company accounts can also help with budgeting, or even keep you on top of other impending liabilities, such as the need to register for VAT - and if you use an accountant, they may be able to get you on the flat rate scheme too. Regardless of your legal position, having properly maintained company accounts will enable you and your accountants to make the best possible business decisions, and help you to keep more of the money that you work so hard for.

Have a look at our website to read additional information on company accounts specialists and the right accountant for you .