Annual financial statements, strategically conceived
Annual financial statements and accounting policy – what’s really behind them
The annual financial statements are much more than a mere formality at the end of the financial year. For small and medium-sized companies in particular, they fulfill several functions, both externally and internally. Those who understand its importance can manage and shape it in a targeted manner.
1. annual financial statements as a signal to the bank
For many companies, a key addressee of the annual financial statements is the house bank. If financing is in place or a loan is to be extended, the bank regularly requests the latest annual financial statements – and takes a close look.
Important key figures such as:
-
Sales development,
-
Profit development,
-
Equity ratio
are the focus here. Entrepreneurs should be proactive and provide clear explanations as part of a balance sheet report, particularly in the event of major changes (e.g. slump in profits, higher cost of sales, depreciation). This creates trust and prevents unnecessary queries or premature assessments by the bank.
2. tax significance of the annual financial statements
In addition to its external impact, the annual financial statements serve one purpose above all: to determine the taxable profit. This is transmitted electronically to the tax office together with the tax return and forms the basis for the tax assessment.
This means that the profit reported in the balance sheet has a direct impact on the tax burden. This is why the so-called balance sheet policy is so important.
Objectives can include
-
Defer tax payments into the future to conserve liquidity in the short term,
-
Bring forward expenses, e.g. create provisions,
-
Delay income deliberately, e.g. by using accounting options.
The progressive effect of the income tax rate also plays a role: reporting profits as evenly as possible over several years can help to smooth the tax burden and avoid top tax rates, especially for sole traders and partnerships.
Conclusion: Actively use the annual financial statements – don’t just deliver them
The annual financial statements are not just a review, but also a tool for external presentation and a means of tax planning. Those who know their key figures, recognize developments at an early stage and implement targeted accounting policy measures can present themselves strategically to both banks and the tax authorities.
Our tip: Special developments, fluctuations or negative figures should not simply be left without comment – but should be actively explained in the balance sheet report.
Are you unsure? Get your first aid!
Are you at a loss with your request? Not sure whether you are using the right document or how to proceed?
Then book your individual first aid consultation with our legal experts.
Personal. Clear. To the point.
- Answers to your specific questions
- Practical, understandable, without legalese
- Book quickly – with your preferred date
Law doesn’t have to be complicated, just explained correctly.
