Accountants – why would a company fail to file accounts?

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  • Accountants – why would a company fail to file accounts?
  • Premier Icon tomd
    Subscriber

    I’m doing a bit of background digging on a private Ltd company. Medium sized outfit, company name has been around a long time but current Ltd co since 2007. It is owned but a major international comglomerate but has different brand etc.

    On companies house their accounts are 2 months overdue. Is there any earthly ligit reason why this would be the case? My superficial understanding is that it is actually illegal and earns a fine. I could sort of understand for a one man band ltd co but for a proper company seems odd.

    I’ll ask them when I speak to them but want to avoid being fobbed off. It would be nice to see the last years accounts to judge how they’re getting on.

    grantyboy
    Member

    I work as an senior accountant for a ‘proper’ company. We are sometimes late in filling, usually down to audits overrunning and lack of manpower etc in balancing day to day running the business and doing the statutory needful

    P-Jay
    Member

    I’m not an accountant, but I used to work in a practice. I’m also a former Credit Underwriter in the B2B market.

    It happens ‘fairly’ often.

    99% of the time it’s as above, a combination of normal logistical stuff, human error or shit happens. Yes it’s a legal requirement, but it’s not a criminal offence and the fines are relatively small. £150 – £3000 depending on how late if and whether the previous years accounts were late.

    Maybe 1% of the time it’s for something more serious, if I had my underwritters hat on I’d want to know why they hadn’t filed by now (it’s getting on for a year since their year-end) and I might be less inclined to take much comfort from draft accounts, depending on previous performance / risk of lend.

    Premier Icon tomd
    Subscriber

    Thanks guys. I’m only really interested to see the last years accounts for the turnover and profit. The company was struggling a bit judging by earlier accounts so interested to see which way it was going before deciding whether to get involved with them. Losses in 2017 were a big % of turnover, it was judged a going concern because of the support of the parent company. It’s a cyclical / variable industry so bad years do happen.

    anono
    Member

    Ask Mike Ashley [accountants in joke]

    Premier Icon FB-ATB
    Subscriber

    If they’re part of a group, maybe they are realigning year ends or the whole group are changing year end date. Should be info filed on companies house to that end unless they’re late with that.

    Late filing would have an effect on credit rating, credit insurance if their suppliers have them covered and so on.

    Have you access to any credit checking services? If not, PM me and I can run it through the agency we use.

    Premier Icon tomd
    Subscriber

    Thanks, I’ve pinged you a PM.

    Premier Icon FB-ATB
    Subscriber

    it was judged a going concern because of the support of the parent company

    The parent only had to say to the auditors “yes, it’s not profitable, but we will support them” to get the accounts signed off and then pull the plug.

    The credit agency we use does allow for people to indicate payment experience with companies which will include current year, whereas the accounts you are waiting to be filed will be for the year to Dec 18 (?) so a year old anyway.

    mefty
    Member

    Late filing is pretty common but it is getting increasingly expensive – doing the stats get put aside as more important business issues are dealt with and then the organisation finds it has run out of time to finalise them, having missed the first deadline, everything gets puts on hold until the next deadline/fine increase.

    Premier Icon howarthp
    Subscriber

    The revenue number is likely to be accurate but don’t necessarily read too much into the profit – particularly if it’s part of a group

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