Accounting period
Accounting period is the span of time you use to record income and costs and to prepare your accounts. It’s the basis for your profit and loss, balance sheet and other reports, so results from different periods can be compared fairly.
Your accounting period for financial statements may differ from the period used for taxes. You can also have shorter internal periods for management reporting, while VAT and payroll often follow their own separate cycles.
Keep periods consistent
Pick a year-end that fits your business cycle and keep it consistent to make trends easier to read.
Common period setups you might use:
- Financial year – the main period for your annual accounts.
- Corporation Tax accounting period – the period your company’s tax return is based on; it may not always match your financial year.
- VAT period – the interval used for VAT returns, often shorter than a year.
- Management period – monthly or quarterly reporting to track performance during the year.
