Why a Company’s Filed Accounts May Not Show Its Sales
Published
A Dragons' Den founder announces substantial sales, but the company's public accounts contain only a short balance sheet. That does not mean the sales claim is hidden in one of the other numbers. It may mean the public filing does not include a profit and loss account.
The government's small-company and micro-entity guidance allows qualifying companies to file less information publicly. Small companies can choose not to send their profit and loss account to Companies House; micro-entities can send a reduced balance sheet. The filed document's format therefore matters before you start searching it for turnover.
Do not use a balance-sheet number as sales
Turnover describes sales over a period. A cash balance describes cash held at a date. Net assets describe the difference between recorded assets and liabilities. These figures answer different questions, even when they appear beside the same company name.
Imagine two businesses that each finish the year with £50,000 in cash. One might have collected £200,000 from customers and paid £150,000 out. Another might have collected £1 million and paid £950,000 out. Starting from zero cash and ignoring other cash movements, both end at £50,000. The closing balance cannot tell you which sales history occurred.
That calculation is only an illustration of the information gap. In a real set of accounts, borrowing, investment, tax, asset purchases and other movements can also affect cash. Reading a closing bank balance as turnover skips the whole history that produced it.
Check which period the document covers
The accounts' financial year-end is more useful here than the date you downloaded them. A filing accepted after an episode may still describe a period before filming or broadcast. It cannot automatically confirm or contradict a claim about the months that followed.
Read the heading and notes for the reporting period and the type of accounts. If there is a profit and loss account, use its labels and units. If there is not, stop looking for a substitute turnover figure in the balance sheet.
Filing rules and actual evidence are separate
Announcements about future filing reforms can make this confusing. Companies House's accounts-change update says the planned requirement for small and micro companies to file profit and loss information has been paused. A promised reform is not evidence that an older document contains the missing figures.
When following a pitch, record public turnover only where a source gives turnover for the relevant entity and period. If the available accounts omit it, leave the figure unconfirmed. You can still describe what the balance sheet reports, but it cannot supply a sales or profit number that is not there.