Using Accounting Software

2. Completing Statutory Returns

Automatic book-keeping makes it easy to prepare statutory returns and annual accounts.

2.1 Using appropriate accounting software should simplify and speed up the preparation of VAT returns .

2.2 The software will make it much easier for you to deal with HM Revenue & Customs.

• You should be able to produce a statement showing your profits (or losses) for the year to date, whenever you want.
• You should also be able to produce a profit forecast for any period (see 4). Use this information to estimate how much tax you will have to pay.
• Use your cashflow forecast to show when the tax bill will arrive, and whether you will have the cash to pay it.

2.3 Using accounting software should allow your accountants to prepare your year-end accounts quickly and easily.

• All businesses are obliged to produce accounts showing their profit and loss and their balance sheet position at the end of each accounting period.
• Many companies are obliged to have their accounts audited, so it makes sense to take your accountants' advice on the selection of accounting software. Your software must be able to maintain a satisfactory audit trail which tracks all the transactions during the year, starting with the invoices and receipts.
• All accounting software should be able to produce a profit and loss account, summarising the performance for the year. Check the software can also provide information for any explanatory notes you might want to provide with your returns.
• Any accounting software should be able to produce a balance sheet summarising your assets and liabilities.