My Ltd Co Books vs Year End Accounts

[CRB14]

I keep my own detailed books that show my cash flow and also forecasts my year profits and interim dividends.

I've just completed my first year end accounts and there's a difference (more profit than anticipated in part as they have included an invoice that I haven't received payment for yet).

As mine is spreadsheet based what do you guys do? Do you balance your own spreadsheets with the accountant's and then start a new set for the new tax year?

[Eric Mc]

If you want your in-house records to properly reconcile with what the accountant has to do to turn the accounts into a legally compliant set (i.e. a set that satisfies accounting standards, Company Law and HMRC disclosures etc) then your accountant should provide you with a set of year end adjustments to bring your figures in line with theirs.

Be aware that cash flows documents are quite a bit different in nature to accounts prepared on an accruals basis (as all company accounts must be) so tying everything together may be quite convoluted.

[s2kjock]

If you are just running books and records on a cash basis then do nothing. Just keep on ensuring you reconcile to your bank account, keeping in mind that accounts prepared on a year end basis will always be different.

If you want better accounting information closer to the way the year end ones are prepared and on a regular basis then best to discuss it with your accountant, but it will likely involve perhaps a different accounting system or changes to your existing one and changes in how you process transactions.

Trade off of hassle/time/cost vs the better information you will get.

[CRB14]

Thanks guys.

It's just the retained profit bit that's thrown me a little as I've taken it as new year profit but I'll just adjust my sheet slightly. The detailed accounts are all done and dusted so it is just my internal housekeeping.

[Eric Mc]

As s2jock says, trying to marry up what you arrive at using a cash basis of accounting with what the accountant does using the accruals basis is always going to be tricky as the two methodologies differ in some important respects.