Preparing annual financial statements on time
The six-month deadline for a South African company's annual financial statements, who needs them, and what its own books can produce towards them.
By Achekam · · 4 min read · For Running a business businesses in South Africa
For many owner-managed companies, the annual financial statements are something the accountant produces "at some point" after year-end, usually when SARS or the bank asks for them. The Companies Act takes a firmer view. It sets a deadline, and two other bodies, SARS and CIPC, expect to see the statements on their own timetables.
This guide sets out the deadline, which companies need an audit, what SARS and CIPC each expect, and how much of the work your own books can carry before your accountant takes over.
Six months after the financial year ends
The Companies Act text on the government's Companies Act page requires every company to prepare annual financial statements within six months after the end of its financial year. That is section 30(1) in the Act as originally published; later amendments are not reflected in that text, so confirm the current wording with your accountant.
Six months sounds generous. For a February year-end it means the end of August, and the months in between contain a lot: closing the books, stock counts, year-end adjustments, the accountant's review, and the directors' approval. Work back from the deadline and the books need to be closed and clean well before the fifth month.
Public companies must be audited
The same section of the published Act requires a public company's statements to be audited. Other companies may also need an audit or an independent review, depending on their circumstances, and that decision should be made with your accountant early, since an audit adds its own time to the timetable. If you are unsure which applies, when a company must be audited sets out the test.
The statements SARS and CIPC expect
The Companies Act deadline is not the only one in play.
SARS. SARS's guide to completing the ITR14 company income tax return says signed annual financial statements, containing at least an income statement, a balance sheet and notes, must be submitted with the ITR14 by small businesses and by medium to large businesses, including REITs, and are optional for other companies. The company representative or public officer signs them.
CIPC. CIPC says companies that must be audited must file a copy of their latest approved audited financial statements on the date they file their annual return. Its information guide on annual returns adds that companies file audited financial statements, independently reviewed statements or a financial accountability supplement on the same day they submit the annual return. The annual return itself is tied to the company's anniversary of incorporation, which may fall at a different time of year from its financial year-end; see when your CIPC annual return is due.
The practical point is that the statements are needed in several places, each with its own date. Finishing them within six months keeps all of those dates within reach.
What your management accounts give you, and what they lack
A company that keeps its books in Achekam already has much of the raw material. Management accounts show an income statement for a chosen period beside the period before, and a balance sheet at the period end, both added up from the business's own journals and exportable as PDF or CSV. Pick the financial year as the period: the year-to-date preset starts on 1 January rather than at your own year start, so a company with a February year-end should set the dates itself.
Management accounts are not annual financial statements, and the gaps are worth knowing:
- No cash flow statement. The books do not produce one, so it is prepared separately.
- No year-end close. There is no closing entry: the year's profit is not closed to retained earnings and shows as its own line on the balance sheet. Your accountant deals with that in the statements.
- No notes. Accounting policies and notes, which SARS's guide lists as part of the minimum, are written for the statements, not produced by the books.
None of this is a reason to wait for year-end. The cleaner each month's books are, the less there is to fix when the year closes. A business that reconciles its bank accounts, chases unexplained balances and reviews its debtors and creditors monthly hands its accountant a ledger that needs adjustments, not reconstruction. Monthly discipline of that kind, more than any year-end effort, is what makes six months feel comfortable rather than tight.
Working with your accountant inside your books
The usual delay is the handover: exporting the books, sending them to the accountant, receiving adjustments back, and re-entering them. Achekam avoids the copy. A firm you appoint works directly in your own ledger, with no copy made, so the year-end adjustments it posts appear in your own accounting screens. Accounting firms preparing statements from linked books can read statements from a client's linked books.
A timetable that works backwards
- Month one after year-end: reconcile bank, debtors and creditors; count stock.
- Month two: post accruals, depreciation and other adjustments; review the trial balance.
- Month three: hand the closed books to your accountant, or give them access to work in them.
- Months four and five: draft statements, notes and any audit or review work.
- Month six: directors approve and sign; file with SARS and CIPC on their dates.
Put the six-month date in the diary on the first day of the new financial year. Everything else in the timetable becomes easier once that date is fixed.
General guidance only, not advice on your own circumstances. Tax and payroll rules change: check the current position with the authority or your adviser.
