For anyone running a business, an understanding of accounts is essential.
In many cases a trained accountant will actually prepare the accounts of a business, but the proprietors or directors have the responsibility for approving those accounts.
This does not mean that they are expected to have the knowledge needed to prepare the accounts, but they are expected to understand and approve the figures included in those accounts.
Anyone who is self-employed has full responsibility for the figures entered on their tax returns, no matter who actually prepares the accounts.
Company directors are assumed to be aware of the financial position of their companies, even though they may employ someone else to prepare the accounts.
A director who continues trading when he knows, or ought to have known, that the company cannot pay its debts may be required to pay compensation and could be barred from being a director in the future.
How to Understand Accounts is a new guide for the layperson to understanding and interpreting your accounts. It reveals just how easy it should be to prepare, read and act on your business accounts.
