Much more than just a tax return, end of year accounts include not only your Profit and Loss account required for Self Assessment, but also your Balance Sheet which includes all your Assets and Liabilities. This gives you a much better idea of how your business is progressing and what it may be worth.
Assets include all the monies that you are owed by your customers and any loans that you have provided for others, and the value of all the property, machinery, equipment and tools that you own.
Liabilities include all the monies that you owe to your suppliers and any loans that are still to be repaid, mortgages remaining on property, and the value of any outstanding contracts for which you have been paid but are still to deliver.
Another great advantage of year end accounts is that you can have meaningful categories that allow you to judge what areas of you business are most successful and thereby worthy of greater focus. Detailed annual accounts will also point out areas where you may have a high level of unnecessary expenses.
Our software allows the setup of ‘Business Categories’ for business analysis, and not just ‘Tax Categories’ for tax returns.
As an example, in your tax categories you will have conflated categories such as ‘Rent, Rates, Power and Insurance’ – but this one tax category will include four (or more) business categories that allow you to get a more detailed breakdown.