• Financial Planning
  • Budgeting Basics
    • Creating a Budget
    • How to use your budget
  • Cashflow Basics
    • Cashflow Forecasting
    • Managing Cashflow
  • Profit & Loss Basics
    • Records required for producing a profit and loss account
    • Profit and loss accounting periods and tax
  • Balance Sheet Basics
    • Contents of the balance sheet
    • Accounting periods
• Raising Finance
• Bank Articles
• Support Schemes
• Local Finance Support Schemes

Accounting periods

A balance sheet normally reflects a company's position on its accounting reference date (ARD), which is the last day of its accounting reference period. The accounting reference period, also known as the financial year, is usually 12 months. However, it can be longer or shorter in the first year of trading, or if the ARD is subsequently changed for some reason.

Companies House automatically sets the first ARD. Thus the end of the first financial year is the first anniversary of the last day of the month in which the company was formed. If you decide to change this, you will need to notify Companies House.

Find out about ARDs on the Companies House website.|

You should also notify HM Revenue & Customs (HMRC) if you change your ARD. Self-employed people and partnerships can choose their first accounting period. Subsequent accounts are usually prepared a year after the first balance sheet date.

Your business may decide to draw up accounts to help you monitor business performance as frequently as monthly. In this case the figures - often known as management accounts - are for internal use only. You do not need to file them with Companies House or HMRC.