Which Accounts Are Prepared At the End Of The Financial Year?

PHS Team

08 Sep, 2025

The end of the financial year is an important time for all UK businesses. It marks 12 months of tracking money received and spent. Accounts are prepared Balance sheet, profit and loss account, notes to the accounts, directors’ report, and sometimes a cash flow statement at the end of the year.

Having these accounts correct helps follow the law, calculate taxes, and understand how well the business is doing.

Whether you are a business novice or experienced, knowledge of these year-end accounts helps you remain on track and ready for what is ahead.

What is the financial year end?

The year end of finance is when the accounting year for a company is brought to a close. It typically runs for 12 months from the incorporation date decided by the business or a fixed financial period.

A company’s financial year may not match the UK tax year (6 April to 5 April). At the end of their financial year, companies prepare statements showing all financial transactions during that period.

Types of accounts prepared at the end of the financial year

At the end of the financial year, companies prepare different financial and accounting reports. The exact reports depend on the company’s size and type, but usually include:

1. Balance Sheet

The balance sheet is a snapshot of what a business owes and possesses on the same date that the financial year ends. It includes a list of:

• Assets such as property, plant, inventory, and cash.
• Liabilities like loans, accounts payable, and accrued expenses.
• Shareholders' equity is the net value owned by the shareholders.

This statement is important in determining the worth and financial condition of the company at year's end.

2. Profit and Loss Account (Income Statement)

This account accumulates the financial performance of the company for the entire financial year. It records:

• Total income and revenue from sales.
• Operating expenses like salaries, rent, utilities, and supplies.
• Profit or loss, that is, the difference between income and expenses.

It determines how good or poorly the company did, profitability or losses during the year.

3. Notes to the Accounts

There are further details and explanations after the balance sheet and profit and loss account. They comprise:

• Comments on accounting policies.
• Details of material transactions.
• Information about possible liabilities or future obligations.

The notes bring in transparency and insight, making it easy to comprehend figures without.

4. Directors' Report

Most limited companies are required to prepare a directors' report as part of their accounts. This report summarises:

• Summary of company activities.
• Significant events affecting financial performance.
• Development plans for the future.

It helps stakeholders evaluate the direction and governance of the company.

5. Cash Flow Statement

Although not required in every instance, a cash flow statement may be included. This report depicts:

• Cash inflows and outflows from operations, financing, and investment.
• How the cash is being raised and spent during the year.

It is most effective for cash management and asset monitoring on an effective basis.

Importance of preparing accounts at financial year end

Preparing accounts at the financial year end is not only a legal requirement for limited companies but also an important tool to assess business health. These accounts serve several functions:

• Legal Compliance: It keeps the business in compliance with the law by providing correct financial records to Companies House and HMRC.
• Right Tax Calculation: End of year accounts allow for proper calculation of corporation tax, ensuring the business pays the right amount of tax and avoids penalties.
• Informed Business Decisions: Business owners make wise business decisions with the aid of year-end accounts, budgeting, and expansion planning.
• Trust of Investors and Lenders: Right accounts made on time create confidence and credibility with lenders, investors, and stakeholders.
• No Penalties: On-time submission of correct accounts prevents late filing fees and penalties from regulatory bodies.
• Better Record Keeping: The planning process encourages maintaining good-quality and well-organised financial records throughout the year.

Additional financial records and reconciliation

Before completing these accounts, companies ensure that all accounting records are complete and correct at the end of the financial year. This involves:

• Bank statements reconciled with accounting records.
• Invoices compared with payments and receipts.
• Payroll and expense records checked.

These steps correctly post income and expenses to the correct financial year, giving a true and accurate reporting position. 

Filing and deadlines

When available, the year-end accounts must be filed accurately:

• With Companies House within 9 months of the financial year end.
• As part of the Company Tax Return to HMRC within 12 months.

Late filing can result in automatic penalties. Early organisation and prompt filing are therefore strongly advisable.

Conclusion

At the end of the financial year, UK companies submit a suite of accounts including the balance sheet, profit and loss account, notes to the accounts, directors' report, and possibly a cash flow statement. 

A clear understanding of what accounts are to be prepared and the deadlines ensures trouble-free financial year end routines for any company.

If you are an accountant or a business person with year-end account concerns, PHS Associates is here to help. We offer individualised help to prepare accurate year-end accounts according to legal requirements and within deadlines. 

Contact PHS Associates at 0208 8611685 or email info@phs-uk.co.uk.  

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