Can I Do My Own Accounts for a Limited Company
2nd February, 2024
Running a limited company comes with its share of responsibilities, and managing the company’s accounts is a key aspect of ensuring financial stability and compliance with legal requirements.
Many entrepreneurs wonder if they can handle their own accounts, and while it’s possible, there are important considerations to keep in mind.
Running a business can be hard – especially when it comes to dealing with your own accounts. In this guide, we’ll explore the intricacies of managing your own accounts for a limited company in the UK along with the challenges and benefits of taking on this task independently.
Contents:
Understanding the Basics
Before jumping into the question of whether you can do your own accounts for your limited company, let’s outline the basics of company accounts. Limited companies are legally required to maintain accurate and up-to-date financial records.
This includes annual accounts. These provide a snapshot of the company’s financial position at the end of the financial year and include a balance sheet, profit and loss statement, and notes to the accounts.
While it’s possible to do your own accounts for a limited company, you should first understand and manage financial statements, including the profit and loss account, ensuring accurate and compliant reporting for your limited company accounts.
Limited companies must file an annual Corporation Tax Return with HM Revenue & Customs (HMRC), accompanied by the company’s accounts.
The company tax return is a document that outlines the company’s income, profits, and tax liability. It is a legal requirement and must be submitted to HMRC.
Companies House requires an annual confirmation statement, providing updated information about the company’s directors, registered office, and share capital.
Tips for Successful Accounting
Despite the challenges of navigating complex accounting standards like GAAP and staying updated with tax laws, which require significant time and attention to ensure accuracy and compliance, there are benefits to managing your own accounts for your limited company, including cost savings.
For entrepreneurs considering the DIY route for their company accounts, here are some tips to ensure success:
- Utilise user-friendly accounting software to streamline the process. These tools often come with features that automate tasks, reducing the risk of errors.
- Familiarise yourself with basic accounting principles. Some online resources and courses can provide a solid foundation for managing company accounts.
- Establish an approach to record-keeping that works for you. Keep receipts, invoices, and other financial documents organised and easily accessible. This will simplify the accounting process and encourage auditing if necessary.
- Regularly reconcile your bank accounts to ensure that your records match your financial transactions. This practice helps identify discrepancies early on.
- While you may be managing your accounts independently, seeking professional advice on complex matters or changes in tax legislation is an important step. Consulting with an accountant periodically can provide valuable insights and ensure compliance.
Sole Trader Accounting with Haggards Crowther
The decision to do your own accounting for a limited company is a personal one, influenced by factors such as your business size, financial literacy, and the time you can commit.
Whether you operate as a sole trader or are launching a new business, we offer tailored assistance to meet your specific business requirements. Our comprehensive services encompass bookkeeping, payroll, and VAT management, complemented by expert guidance on essential aspects of sole trader operations.
Here at Haggards Crowther, we understand how time-consuming and stressful it can be to deal with accounting on your own, which is why we are here to help. We have experience working with a range of different clients, so you can rest assured that we can provide you with the very best service and advice.
From advising you on tax repayments to assisting you with the completion of your tax return and more, we have everything you need in one place. For more information on the services we provide or to speak to a member of our team, don’t hesitate to get in touch with us.
Alison gained her extensive experience in finance by working for a local manufacturing company and then for a private equity backed veterinary group, specialising in acquisitions. She joined the team at Haggards in 2020 and established herself as a valuable accounting professional.
