You need to do annual financial statements for your company every year. This include private companies, close corporations, sole proprietors, non profit companies and partnerships.
When to do financial statements.
The financial statements have to be compiled after the financial year end of the company. The statements will include transactions for a period of 12 months. Except for the year in which the company was started, then it will only include for the number of months leading up to the first financial year end.
The majority of companies have February as a financial year end, but any month can be chosen when the company is registered. This option is not available for sole proprietors, and the financial year end will always be February.
What it comprises of.
There are some standards that have to be upheld when annual financial statements are compiled. The following must be included.
- Income statement
- Balance sheet
- Statement of changes in equity
- Notes to the financial statements
- Cash flow statement
- Tax computation
Once the financial statements are compiled, it has to be signed by an accredited accountant. Read more.
When to submit your tax return.
Taxpayers have 12 months from the end of the financial year end to submit their tax return(also called a ITR14) to SARS. The tax return is submitted using the details on the financial statements.
What else is financial statements used for.
When you want to apply for credit, the first thing the financial institution will ask you, is to supply the annual financial statements. In some cases, the financial statements must also be submitted when applying for tenders. It is also crucial, keep track of your profit/losses, and to ensure that the correct information is submitted to SARS.
Management statement
It is also possible to compile financial statements for a period for less than 12 months. This is called financial statements, comprises of the same reports, and also have to be signed off by an accountant.
