Is it time to prepare financial statements? By law, all persons operating a sole proprietorship are required to prepare financial statements at the end of the financial year. A financial statement is a summary of the past year and explains how the company has performed. In this blog post, we’ll take a look at what applies to you as a sole proprietor and how to create a financial statement step by step. Let’s start with what a financial statement is!
Vad är ett bokslut?
The financial statement is a compilation of all the bookkeeping made during the financial year. All companies with business events are required to create a booklet. Depending on the size and turnover of your individual company, you can create a simplified or regular booklet. In some cases, it may be necessary to conclude the financial year with an annual report.
A simplified financial statement should include an income statement and a balance sheet. An ordinary financial statement should also include additional information about the income statement and balance sheet. On rare occasions, if you run a large sole proprietorship, you must prepare an annual report at the end of the financial year. The annual report includes the board of directors report, income statement, balance sheet, additional information and a report describing capital changes.
Vilket bokslut ska du upprätta för din enskild firma?
As explained earlier, the company’s size and turnover depend on the role and decide which financial statements your company should prepare. If your company has a turnover of less than SEK 3 million, you can prepare a simplified financial statement at the end of the financial year. If your company’s turnover is over SEK 3 million, you need to prepare regular financial statements. Considering your individual company is larger, you should prepare an annual report that complies with K3 regulations. In order for your company to be considered larger, you must have met 2 of these conditions for 2 consecutive years.
– The average number of employees of the company is over 50.
– The company’s total assets have amounted to more than SEK 40 million
– The company’s net sales have amounted to more than SEK 80 million
However, there is nothing to prevent you from running a sole proprietorship and having a turnover of less than 3 million to prepare a regular financial statement or annual report. So choose yourself.
Så gör du förenklat bokslut steg för steg
The first thing you need to do before you start with the financial statements is to prepare yourself This is done by ensuring that the current accounting is complete and reconciliations are made to check that income and expenses have been booked on the last day of the financial year. Make sure that you have access to Accounts receivable and bank statements etc. If you have stock, you must inventory the stock on the balance sheet date and produce a stock list.
Reconcile balance sheets
The next step is to start reconciling all balance sheets. Check that the value of the account is correct If you have assets such as machines, their depreciation must be booked within the financial year If you have other write-downs where the value decreases these must also be recorded within the financial year.
End of year allowances
The savings can allow you to defer taxation on profits to a later time. An accrual fund is an example of a provision where you want to defer the taxation of a profit to a later time. You as a sole proprietorship can put up to 30% of your income into an accrual fund. You can even draw the conclusion by deferring taxation, for example, if the company performed well one year but worse another year.
Calculate and bookkeeping the tax
After you have checked the balance sheets, it is time to compile the company’s results before tax. Based on the company’s results, you need to calculate how much tax you have to pay. This is called achieving a taxable result by adjusting taxes from the company’s earnings.
After the corporate tax was calculated, it was time to send the tax. The tax must be recorded as an expense and you can then compile the income statement for your company. The result you see is the company’s profit or loss for the past year. The last thing you do is “zero” by posting the income statement and transferring it to the balance sheet as unrestricted capital for next year.
Compile financial statements
The last step is to compile the financial statements. You do this by printing the income statement and balance sheet. The financial statements are then signed by you as the owner and should be kept for 7 years.
We hope that these points have helped you to prepare financial statements for individual companies. If you feel that you still have questions or want professional help, you are warmly welcome to contact us. At Simsons Accounting agency we have extensive experience in preparing financial statements for individual companies in various industries Contact us so we can tell you more!
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