I've always filed accounts for clients which show the minimum information required, so it's been abbreviated accounts for most companies until the new regime this year. However, one of my clients is adamant that he wants us to file full accounts because an expert on his well-respected business development course says this is best for credit ratings. The turnover is £4m and the company's in construction. I think this is utter madness, but am I missing something?
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No it's not madness at all, especially as your client has provided a logical reason as to why it it is in his interest to do so.
You may not agree with him, but that is none of your business is it?
It's a judgement for each client to make - to weigh up and balance the advantages and disadvantages of filing more information than the minimum necessary. It is only to be expected that some will make one decision and others will make a different one. Your only job is to ensure that your client is aware of all relevant factors to take into account - no to take his decision for him, or to accuse him of being mad.
It is your client's choice what accounts are filed at Companies House, subject to meeting the minimum statutory requirements.
You should make your client aware that the information would be available to everyone, and that includes his competitors. Making him aware he is handing commercially sensitive information, such as margins to the competition might be enough to put him off the idea. You should also point out that he can always supply full copies of accounts to the specific businesses he is asking for credit. I would think that would be sufficient for his purposes in seeking good credit terms.
At the end of the day, it is their business. All you can do is advise.
As someone who spends a lot of time doing in house credit check on parties we may do business with, full accounts are a real bonus when available.
If the company (x) is sound then displaying that is useful at the outset.
If we say have two or three parties in contention the one (x)who looks the best at the outset has a head start over the others (y), the fact I later ask and get full accounts from the others(y) is all well and good but our earlier in house discussions may make the party that was most forthcoming at the outset (x) the favourite, the others are already playing catch up as we have already nearly decided that x gets the contract over y.
Most business deals involve a process of sniffing the air, pass accounts test at outset and then a few calls get made to find out who has used/worked with them etc, find out what they are like, can they be trusted.
Those who are not forthcoming before they even know they are in the race may never even get into the race, in fact they may never know there was a race.
Following on from what DJKL has said, we have had clients whose credit rating has fallen because abbreviated accounts have been filed.