Financial statements: everything you need to know as a business owner in 5 questions and answers
Financial statements: everything you need to know as a business owner in 5 questions and answers
July 2023 - Summer holidays? Not for your accountant! He or she is working overtime these days to complete your company's annual accounts. As required by law, these must be submitted to the Central Balance Sheet Office within seven months of the end of the financial year. Your accountant has his hands full, but what do you really know about annual accounts?
What is a financial statement?
Financial statements are financial reports of the past financial year that companies are required to prepare. It contains four sections:
the balance sheet: statement of all assets (assets) and liabilities (liabilities) of a company at a given time
the income statement: a statement of income and expenditure during the financial year
the notes: additional information on the valuation rules used by the company to calculate the balance sheet and income statement.
the social balance sheet: contains information on the workforce and training.
Who should publish financial statements?
With some exceptions, all Belgian companies whose shareholders' or partners' responsibility is limited to their contribution must file their annual accounts with the National Bank's Balance Sheet Centre every year.
What if I submit my financial statements late?
Six months after the close of the financial year, the general meeting of the company must approve the annual accounts. A maximum of 30 days later, they must be filed with the National Bank of Belgium. So that gives you a total of seven months to comply with your publication obligation. Are you too late? Then you will be fined and may suffer reputational damage.
Important: the law states that a company subject to a publication obligation may be dissolved through the courts if it fails to publish its annual accounts for 36 months.
How can I request financial statements?
The annual accounts of all Belgian companies are collected by the Central Balance Sheet Office. You can consult them online at this link. It contains useful information about a company's financial health. Useful if, for example, you have doubts about a customer's solvency.
What can I do to help my accountant prepare financial statements?
As you could already read in question 1, the annual accounts include the balance sheet and income statement. To prepare them, your accountant will need all incoming and outgoing invoices. Make sure you provide these on time (as soon as possible after the close of the financial year, preferably sooner). Digital, for example using Basecone, is preferred by most accountants.