Most small businesses prepare a set of financial accounts for income tax purposes once a year. It may take a further three to nine months after the year-end before these accounts are finalised and the trading results are known.

By contrast companies quoted on the stock exchange are required to publish half and yearly financial statements within three months of the period end. In addition to the statutory accounts, most quoted companies produce detailed monthly accounts and reports to aid and support critical management decisions.

We recommend that small business track critical information (eg Sales Volumes and Bank Balances) daily, and less important information (eg Outstanding Debtors, Stock Levels and Expenses) monthly. A full set of management accounts should be prepared and reviewed at least once a quarter.

Also see How accurate are your records?