What accounting records should our RMC keep?

All Companies have a duty to keep accounting records, for example receipts and invoices etc.

These records will form the basis for preparing annual accounts.

For financial years starting on or after 6 April 2008 the Companies Act 2006 and Regulations made under it specify the format in which companies must prepare annual accounts, the information that needs to be disclosed, and the rules affecting the valuation and treatment of the transactions and balances appearing in company accounts. The Companies Act 1985 and its Regulations made under it apply to company accounts for financial years starting before 6 April 2008.

These requirements to produce annual accounts are long and complicated. If you are uncertain how to produce them you may wish to consider consulting a professional accountant to prepare your annual statutory accounts. Click here for Accountants that will specialise in services for Residents Management Companies.

What if our company cannot afford a professional Accountant?

Some RMC’s may not be able to afford or may not wish to employ an accountant and try to prepare their accounts themselves. Sometimes if they are prepared by someone without the right experience things can go wrong. Accounts can be produced without reference to the legislative requirements; however the Directors of an RMC could sign them acknowledging that the accounts comply with the legislative requirements, which is a danger as Directors can be prosecuted if their accounts fail to comply with the legislative requirements.

Some RMC’s organise that a Director keeps a record of transactions, and also expect the individual to prepare the statutory accounts. All shareholders should be sure that they are acting responsibly by imposing this requirement on the chosen Director as preparing statutory accounts can be time consuming and stressful. The chosen individual will need good training and a meticulous approach to the position.

What can we do to make book keeping easier?

Members can make the life of the Director whom prepares the statutory accounts for the RMC easier by ensuring that monies paid in to the account is done in a timely manner.

Preparing the accounts on a regular basis, i.e. weekly will make the task easier.

For more information go to http://www.companieshouse.gov.uk/about/gbhtml/gba3.shtml