What are limited company accounts and what do they tell me?

Limited company accounts are the formal annual financial statements of the company. They summarise its financial performance and position for the accounting period and form part of the company's statutory reporting obligations.

They show useful headline information about profit, assets, liabilities and reserves, but they are prepared after the period has ended. They are therefore better at confirming what happened than helping you manage what is happening now.

Annual accounts aren't a substitute for regular management information. If you only look at the business when the statutory accounts are prepared, many of the decisions that affected those figures were made months earlier.

A good finance process uses accurate bookkeeping and regular management reporting during the year, then uses those records to produce the annual accounts efficiently at year end.