Companies House (CH) has said that it rejected the accounts of more than 5,000 companies in August 2016. What’s the reason and what steps can you take to avoid similar trouble?
Accounting standards. New accounting regulations came into force in January 2016 and the largest accounting body in the UK says it’s received a record number of enquiries about submitting the new style accounts to Companies House (CH). Concerns have been raised that the new rules are to blame for the high level of accounts rejected by CH.
Statistics. CH did make a statement saying that “There has not been any significant increase in reject rates” which can be linked to the changes in accounting regulations. In fact, it says that the latest rejection rates are within the normal range. This scotches the idea that the new rules, which your accountant follows when preparing your company’s financial accounts, are behind the trouble.
Simple causes. According to CH, the reason for the majority of rejections are mundane and easily rectified as long as someone spots the problem before the accounts are submitted. When your accountant sends the accounts to you for approval, the mistakes to watch for are – starting with the most common errors – that the:
• “made up date” is duplicated or missing, e.g. the accounting period end date shown is the same date as for the previous accounts
• balance sheet signature is missing – the accounts must be signed by an authorised person, e.g. a director
• company name is invalid – the name shown on the accounts must tie up exactly with that shown in the Companies House register
• company number has been mismatched – the company name shown doesn’t tie up with the company number meaning that either one or both are incorrect.
Tip. The errors above cause roughly 85% of accounts rejections by CH. Keep the list handy when reviewing your company’s accounts. This should greatly reduce the risk.
The majority of rejections are caused by simple errors such as incorrect dates and missing signatures. Keep these in mind when reviewing your financial accounts to substantially reduce the risk of rejection.