How to Prepare Your Company Accounts from Bank Statements

If you run a small limited company, your bank statements are the single most important source for preparing your statutory accounts. Every pound that flows in and out of your business bank account tells a story — and with the right approach, you can turn those transactions into a complete set of accounts ready for Companies House and HMRC.

This guide walks you through the entire process, from gathering your statements to filing your finished accounts.

What Statutory Accounts Include

Before diving in, it is important to understand what you are building. Statutory accounts for a UK limited company typically include:

• Balance sheet (also called a statement of financial position)
• Profit and loss account (also called an income statement)
• Notes to the accounts (explaining key figures and accounting policies)
• Director's report (for companies that are not micro-entities)

If your company qualifies as a micro-entity (turnover under £632,000, balance sheet total under £316,000, and fewer than 10 employees), you can use the simplified FRS 105 format, which requires significantly less detail.

Step 1: Gather All Your Bank Statements

Start by downloading or collecting bank statements for every account your company holds for the entire accounting period. This includes:

• Business current accounts — your primary trading account
• Savings accounts — any deposit or reserve accounts
• Credit card statements — if the company has a business credit card
• PayPal or Stripe statements — if you receive payments through payment processors
• Loan accounts — any business loans or overdraft facilities

Make sure you have statements covering the full accounting period — from the first day to the last day. If your year-end is 31 March 2025, you need statements from 1 April 2024 to 31 March 2025.

Step 2: Categorise Every Transaction

This is the most time-consuming part but also the most important. Go through every transaction and assign it to a category. Common categories include:

Income:

• Sales revenue
• Interest received
• Other income (grants, refunds, etc.)

Expenses:

• Cost of goods sold / direct costs
• Rent and rates
• Utilities (gas, electric, water, internet)
• Insurance
• Travel and subsistence
• Professional fees (accountant, solicitor)
• Office supplies and equipment
• Marketing and advertising
• Bank charges and interest
• Software subscriptions
• Staff costs (salaries, pensions, NI)

Non-trading items:

• Director's loan repayments or drawings
• VAT payments to HMRC
• Corporation Tax payments
• Dividend payments
• Capital purchases (equipment, vehicles)

Important: Director's drawings and loan repayments are not expenses — they are balance sheet movements. Getting this wrong is one of the most common mistakes in DIY accounts preparation.

Step 3: Create a Trial Balance

A trial balance is a summary of all your categorised transactions. It lists every account with its debit or credit balance and ensures that total debits equal total credits.

Your trial balance should include:

Account	Debit (£)	Credit (£)
Bank	15,000
Sales Revenue		85,000
Cost of Sales	30,000
Rent	6,000
Utilities	2,400
Director's Loan		5,000
Corporation Tax	3,200
Share Capital		1
Retained Earnings		(brought forward)

The trial balance is the foundation from which your profit and loss account and balance sheet are built.

Step 4: Build the Profit and Loss Account

Using your categorised income and expenses, construct your profit and loss account:

• Turnover (total sales revenue)
• Less cost of sales = Gross profit
• Less administrative expenses = Operating profit
• Less tax on profit = Profit for the financial year

For micro-entities using FRS 105, you only need to show turnover, other income, cost of raw materials, staff costs, depreciation, other charges, tax, and profit/loss.

Step 5: Build the Balance Sheet

The balance sheet shows what the company owns and owes at the year-end date:

Assets:

• Fixed assets — equipment, vehicles, property (at cost less depreciation)
• Current assets — bank balance, trade debtors (money owed to you), prepayments

Liabilities:

• Current liabilities — trade creditors (money you owe), tax owed, accruals
• Long-term liabilities — loans due after more than one year

Equity:

• Share capital — usually £1 for a single-share company
• Retained earnings — accumulated profits less dividends paid

The balance sheet must balance: Assets = Liabilities + Equity.

Step 6: Prepare Notes to the Accounts

Even for micro-entities, you need basic notes covering:

• Accounting policies (basis of preparation, revenue recognition)
• Guarantees, financial commitments, and contingent liabilities if any exist
• Advances and credits granted to directors (director's loan account balance)

Step 7: Format and File

Your accounts must be filed with Companies House in a specific format:

• Micro-entities (FRS 105): Simplified balance sheet and notes only — no P&L required to be filed publicly
• Small companies (FRS 102 Section 1A): Abbreviated accounts with limited disclosure
• Medium and large companies: Full accounts with detailed disclosures

All filings must now be submitted digitally, and accounts filed with HMRC alongside your CT600 must be in iXBRL format — a tagged digital format that most people cannot produce manually.

The Timeline

• Year-end date: This is when your accounting period closes
• 9 months after year-end: Deadline for filing accounts with Companies House
• 12 months after year-end: Deadline for filing your CT600 with HMRC
• 9 months and 1 day after year-end: Deadline for paying any Corporation Tax due

Late filing attracts automatic penalties starting at £150 and rising to £1,500 for accounts that are more than 12 months late.

How TaxDocs Automates This Entire Process

Doing all of this manually is achievable but extremely time-consuming — often taking 20-40 hours for someone without accounting training. This is exactly the problem TaxDocs was built to solve.

With TaxDocs, you simply:

1. Upload your bank statements (PDF or CSV format)
2. AI automatically categorises every transaction
3. Review and confirm the categorisation
4. Receive your complete statutory accounts in FRS 105 or FRS 102 format
5. Get your CT600 generated automatically with iXBRL tagging

The entire process takes minutes instead of days, and the output is ready to file directly with Companies House and HMRC. Starting from just £29 per filing, it is a fraction of the cost of hiring an accountant.

Key Takeaways

• Your bank statements are the foundation of your statutory accounts
• Categorise meticulously — the accuracy of your accounts depends on it
• Understand the difference between expenses and balance sheet movements
• Do not miss deadlines — late filing penalties add up quickly
• Consider using TaxDocs to automate the heavy lifting and produce filing-ready accounts

This article is for informational purposes only and does not constitute tax advice.