Benefits of annual accounts

Accountant’s Clinic.

How do you prepare for your annual meeting with your accountant? Julia Burn has some tips to make it easier and more beneficial.

Year-end accounts for a business are often just seen as a necessary process that needs to be completed for submission to Companies House and used for the preparation of the annual tax return – whether corporate tax or self-assessment for a partnership or sole trader. 

In my opinion, it is far more valuable for a business to view this as an opportunity to assess how they are performing and plan their future strategy.

Annual accounts meetings often occur after the accounts have been prepared, with the agenda being mainly focused on finalising the accounts and associated tax return. 

But it is of far greater value to arrange a meeting with your accountant before the accounting year-end. 

This way, the meetings will be pro-active rather than reactive. You can work with your accountant to ensure that the business is being as tax-efficient as possible, and any identified issues or potential benefits are addressed on a timely basis. 

There are often tax-efficient measures to be implemented; for example, how staff are remunerated. 

You can also ensure that, for pensions to be an allowable deduction for tax purposes, they are fully paid within the accounting year.

Plan for eventualities

And it is a good opportunity for business owners to ask the ‘what if’ questions and plan scenarios for various eventualities. 

These questions can be:

 What if I bought a car? 

 What if I refitted the surgery?

 What if I developed an online diagnostic tool? 

 What if I want to exit the business?

The economy and all businesses in general have had to adapt and change focus over the last couple of years and, with the increased cost of living, it is even more important to have timely management accounts, budgets and forecasts to ensure the businesses remain on the desired targets. 

Budgets and forecasts should not be seen as a one-off annual exercise but should be revisited and revised or updated on a regular basis.

Your accountants are able to do far more than just prepare and submit your annual accounts and tax returns. They should be an integral part of your planning process to assist you with the smooth running of your business.

Julia Burn (right) is a director at Blick Rothenberg and part of the team advising medical practitioners