The words ‘statutory accounts’ probably evoke visions of pages of numbers all filed away solely to meet legal requirements. However, there’s more to accounts than just that. They’re not just financial records – they’re treasure troves of data, full of insights that you can use to steer your business toward a brighter future.
What are statutory accounts?
Statutory accounts, also known as annual financial statements or company accounts, are comprehensive financial reports that limited companies are required to prepare by law; HMRC then uses them to work out the corporation tax they owe.
Statutory accounts provide a detailed overview of a company’s financial performance, position and cashflows over a specific accounting period, typically one year. They include key financial statements such as the balance sheet, income statement (profit and loss account), cashflow statement and notes to the accounts.
When filing your statutory accounts, you must comply with all the relevant accounting standards and regulatory requirements. Your documents must also be correct and filed on time.
Strategic insights through benchmarking and analysis
At their core, statutory accounts are a snapshot of a company’s financial health at a specific moment in time. That means you can use them to your advantage – rather than forgetting about them once you’ve sent them to HMRC.
It’s not that complicated to see why: by meticulously documenting your financial transactions and summarising them in a detailed report, you get an overview of your business’s performance, spot patterns, and identify strengths and weaknesses.
Accounts also give you a great advantage to compare your performance from one year with your performance in another. You’ll be able to see whether your profit margins are increasing or decreasing, whether your liquidity measures up against industry peers, and what you can do to improve your performance.
Optimising operations and resource allocation
With the data you glean from your statutory accounts, you can go on to make better strategic plans and forecasts that help you achieve your goals – whether it’s expansion, a new venture or securing funding from investors.
You can also better identify potential risks and plans to deal with them if they arise. And of course, you’ll be able to create cashflow forecasts to help you sustain growth once you’ve invested in the business.
Then there’s how your statutory accounts offer a window into operational efficiency and resource allocation: by scrutinising expenditure patterns and cost structures, you can pinpoint and work on areas of inefficiency to streamline your operations.
Building trust and driving growth
Good financial reporting is important for building trust. After all, statutory accounts offer a clear, standardised view of a business’s financial health, giving investors, creditors and other stakeholders the information they need to make informed decisions before they decide to back your business.
A solid set of statutory accounts will also show your commitment to honesty and integrity in financial dealings, as well as your competency – all of which enhances the reputation of your business.
Get in touch with us
Accountants are crucial when it comes to statutory accounts. With the expertise and knowledge necessary to navigate intricate regulations and standards governing financial reporting, they can help you with your accounts.
From preparing your accounts to offering strategic advice, we’re here to support you on your journey. Let us help you unlock your business’s full potential.
Get in touch with us today to find out more.