We find that similar questions come up from time to time, so here’s a few questions and answers which might help.

We also recognise that everyone’s situation is unique, so if this page doesn’t provide the answer you need – please get in touch with us.

What is the purpose of an Audit?

An audit is the examination of the financial report of an organisation – as presented in the annual report – by someone independent of that organisation. The financial report includes a balance sheet, an income statement, a statement of changes in equity, a cash flow statement, and notes comprising a summary of significant accounting policies and other explanatory notes.

The purpose of an audit is to form a view on whether the information presented in the financial report, taken as a whole, reflects the financial position of the organisation at a given date, for example:

  • Are details of what is owned and what the organisation owes properly recorded in the balance sheet?
  • Are profits or losses properly assessed?

When examining the financial report, auditors must follow auditing standards which are set by a government body. Once auditors have completed their work, they write an audit report, explaining what they have done and giving an opinion drawn from their work. Generally, all listed companies and limited liability companies are subject to an audit each year. Other organisations may require or request an audit depending on their structure and ownership.

How Does Invoice Factoring Work?

First: Your company provides goods or services to creditworthy customers and submit correct invoices.

Second: Your company sells it’s unpaid invoices to an invoice factoring company.

Third: A factoring company verifies the invoices and then funds your business with immediate payment. You get up to 90% of the received amount the same day.

Fourth: Customers make payment directly to the factoring company according to the terms of the invoice. The factoring company then returns the balance of the paid invoice minus a fee.

Where can I reclaim VAT?


Austria, Belgium, Bosnia, Bulgaria, Croatia, Cyprus, Czech Republic, Denmark, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Italy, Latvia, Lithuania, Luxembourg, The Republic of Macedonia, Netherlands, Norway, Poland, Portugal, Romania, Serbia, Slovakia, Spain, Switzerland, Sweden and United Kingdom.

Rest of the World:

Afghanistan, Algeria, Bahrain, China/Hong Kong, India, Iran, Iraq, Israel, Kuwait, Lebanon, Morocco, Nepal, Oman, Pakistan, Qatar, Saudi Arabia, South Africa, Sri Lanka, Sudan, United Arab Emirates and United States

Does EFM support entrepreneurs?

EFM continuously provides support to entrepreneurs and start-up companies via various platforms including business surgeries, university/ business school programs and corporate seminars, amongst others.


What is a financial diagnostic due diligence service?

The financial diagnostic due diligence service can be an in-depth financial director diagnostic/due diligence review or a limited scope review for non-execs and funders on target companies. This investigation provides a detailed report on all major financial aspects of the company, and will supply potential investors, funders and non-execs with information that will enable the validation of financial claims made by management of the businesses, and reveal potential pitfalls or missed opportunities of proposed plans. The final report will include a list of key findings and valid recommendations, as well as a detailed conclusion. A transition plan can also be proposed to enable the target company to implement some or all of the recommendations over an interim period.

This financial diagnostic service is only part of the full offering provided by EFM. In addition to this pre-due diligence support, the company also offers commercial and operational financial management support after investment (post due diligence) and ongoing support in every other phase up to exit level, where required.

What are the sources of funding?

Sources of funding include credit, venture capital, donations, grants, savings, subsidies, and taxes. Funding options such as donations, subsidies, and grants that have no direct requirement for return of investment are more commonly known-as “soft funding” or “crowdfunding”.

Funding that facilitates the exchange of equity ownership in a company for capital investment via an online funding portal is known as equity crowdfunding.

How does your service compare to that of an accountant or hiring my own staff?

We believe that EFM offers a flexible and cost-effective service. View our resource comparison table.

When do I have to file my accounts?

Private companies must file accounts within 9 months of their accounting reference date (PLCs – 6 months). This can be extended if there is overseas interest and a form is lodged to gain this extension. Special rules apply to the first set of accounts if they cover a period in excess of 12 months they must be filed within 21 months of incorporation (PLCs – 18 months).

What needs to be included in company stationery?

A Company must state its name (as it appears in its Memorandum of Association) in certain places and on its business stationery (including e-mails and websites).

Every Company must paint or affix its name on the outside of every office or place in which its business is carried on.

Company name must be shown on:

  • Business letters
  • Notices and official publications.
  • Bills of exchange, promissory notes, endorsements, cheques and orders for money or goods purporting to be signed by, or on behalf of, the Company.
  • All its bills of parcels, invoices, receipts and letters of credit.

On all business letters, websites,invoices and order forms the company must also show:

  • Place of registration.
  • Its registered number.
  • Address of registered office.
  • VAT number.It is also good practice to include this information on email footers

A Company does not have to state the directors’ names on its business letters, but if it does then all names must be shown.

What are the minimum requirements to register as a public limited company?

Note filing limits are more onerous and a number of exemptions are not available:

  • At least £50,000 of shares in issue of which at least a quarter must be paid up
  • At least 2 directors and a suitably qualified secretary
  • Statutory declaration must be filed
Why do I need a registered office?

The registered office of a company must be a physical location (not a Post Office box) and must have available the following documents for inspection if requested:

  • Register of directors and secretaries
  • Register of the members of the company
  • Register of the debenture holders of the company
  • Details of the interests of directors in the share capital of the company
  • Details of all mortgages and charges
  • Minute book of general meetings
  • Directors service contracts
What is the minimum number of directors?

It is permissible to have only one director of a company.  A PLC needs to have at least 2 directors appointed.

What is the minimum number of shareholders?

It is permissible for private companies to have only one share with one owner in issue although this is unusual.

What are small company filing exemptions?

These exemptions relate to the filing of accounts at Companies House – they do not relate to the accounts laid down to members in general meeting. These exemptions do not apply if at any time during the year the company is a member of a group, which includes a public company, a banking or insurance company or a company, which is authorised under the financial services act.

Where a company meets the requirements, it need only file accounts that include a balance sheet and selected notes.

It must satisfy the small company filing criteria.

There are also further exemptions if a company is classified as a micro entity. A company meets the qualifying conditions for a micro-entity if it meets at least two out of three of the following thresholds:

Turnover: Not more than £632,000

Balance sheet total: Not more than £316,000

Average number of employees: Not more than 10

Who can be a director?

Generally members can appoint anyone as a director except:

  • Anybody currently disqualified by a court
  • An undischarged bankrupt
  • Anyone under the age of 16

For a PLC anyone over the age of 70 unless specifically approved in general meeting.

The appointment of a company secretary to a private company is optional.

My company is small can you still help me?

Because our range of services is flexible, we can tailor our offering to suit even the smallest company. However our services are not generally suitable for those companies who just need a year end accounts and tax reporting service

Limited space is not an issue as we can still provide a high level of service remotely.

We can still maintain a high level of contact with a client in these circumstances, using our online accounting systems, telephone, e-mail, and the latest Microsoft technology.

Will I need to be audited?

In general, you do not require a statutory audit if your turnover and an abbreviated balance sheet fall below certain limits. This exemption does not apply in certain instances including:

  • The company is a public company unless it is dormant
  • The company is a subsidiary of an overseas undertaking
  • Members holding 10% of the share capital request an audit

Turnover <£5,600,000 (£10,200,000 from 01 Jan 2016)
Balance total <£3,2600,000  (£5,100,000 from 01 Jan 2016)
Employess <50 (unchanged from 01 Jan 2016)

The figures in brackets are the new exemptions expected for accounting periods commencing on or after 1/1/16

The same exemptions apply to the small company filing rules

For more information please visit https://www.gov.uk/audit-accounting-and-reporting-guidance-for-uk-companies 

Will I still have control of my finances?

Yes. Dependent on our service agreement levels our role is to capture, analyse and present accurate financial data, maintain all statutory obligations and offer advice when required relating to the financial aspects of your business.

Why should I outsource my finance function?
  • Reduce and control operating costs
  • Improve company focus
  • Gain access to world-class capabilities
  • Free internal resources for other purposes
  • A function is time-consuming to manage or is out of control
  • Insufficient resources are available internally

In the early days, cost or headcount reduction were the most common reasons to outsource. In today’s world the drivers are often more strategic, and focus on carrying out core value-adding activities in-house where an organisation can best utilise its core competencies.

Will my financial data be secure?

We take every precaution to ensure the security of our clients data. Some of our services are protected by SSL technology, ensuring that all data is secure and encrypted.  SSL certificates are issued by Thawte and Geotrust.

Why do I need to keep an accurate set of accounts?

Legal Requirement –
Companies Act-under the new system of self assessment, the keeping of books is a must and it’s illegal not to.
Tax- to ensure the correctness of tax amounts paid and to be in a position to answer any queries relating to tax.

Control of Business – It’s almost impossible to know whether you are winning or losing, have to pay bills, people owe you money, etc. if you don’t keep books

Finance – If you require loans or finance you will need to show a set of accounts.

VAT / PAYE– records need to be kept for inspection

Where can I get general business information?

The best source of general information for companies in England and Wales is Companies House

For information specific to your business, please take our financial management healthcheck and find out how your business is faring.

The information contained on our site serves as a guide only. Please, do not act on this information alone. Kindly ensure that you always seek professional legal advice regarding your particular situation before taking any action. On the other hand, you may wish to call us for a free – no obligation meeting and we can arrange to undertake a comprehensive evaluation and discuss ways to improve your particular situation.

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