At their most basic accounts will simply show your income and expenditure. They are, in effect, literally a summary of your books and records.
If you buy 100 wooden birdhouses at £1 each, a tin of paint at £10 and a paint brush at £1 you have spent £111. You sell all the painted birdhouses at £3 each. Your accounts are:
Cost of Sales £111.00
For a small sole trader your accounts really can be this simple.
Suppose though that you’d not sold all the painted birdhouses, or that you had only painted 50 and only sold 40 of those. Then you would have stock to consider. Perhaps you sold some to a shop and gave them credit so are still waiting to be paid. That is when your accounts start to look more complicated.
For a limited company there are certain laws and rules which govern how accounts are prepared and presented.
As your business grows you may find it helpful to have management accounts, which give you more detail on the performance of your business. Do certain colours of birdhouse sell better than others? Are birdhouse sales seasonal?
At our initial client meeting we will discuss the type of accounting information you specifically require but we can alter this as your business grows or you need to find out more about how it is operating.