We are often asked by clients about the difference between Financial Accounts and Management Accounts and why credit insurers request this information. 

Here we address the key differences, summarise how insurers use this information and provide insight into why up-to-date financial information is requested by insurers more frequently in the current environment.

What Financial Accounts do you need?

Financial accounts include documents such as a profit and loss account, balance sheet and notes to the accounts, some or all of which have to be submitted to Companies House (depending on the size of your business). They are also known as annual accounts, and are prepared by your accountant. 

There are three business size classifications for the purpose of filing accounts; large, medium and small. Very small companies may also fall under the subset classification micro-entity. These are dictated by thresholds for turnover, balance sheet total and average number of employees of the company. 

Regardless of business size, it is a legal requirement in the UK for all private limited and public companies to file a copy of the Financial Accounts prepared for the members/shareholders at Companies House. 

Unless the accounts being filed are the company’s first, then the time allowed to deliver them to Companies House is:

  • 9 months from the accounting reference date for a private company.
  • 6 months from the accounting reference date for a public company.

Are there any exemptions?

The smaller the company, the more exemptions the business benefits from in terms of filing requirements. Small companies and micro-entities are exempt from audit and the requirement to file a directors’ report or profit and loss account.

A dormant company that is also a subsidiary may also be able to claim exemption. 

What do Financial Accounts include?

Companies House has different account requirements depending on the size of the business. 

Provided they have unanimous shareholder consent, small companies are able to prepare and file a set of abridged or simplified accounts. Similarly, micro-entities must prepare their own form of abridged accounts which differ from small companies. 

Medium-sized company accounts include a profit and loss account, balance sheet, notes to the accounts, group accounts (if appropriate), a directors’ report with business review and an auditor’s report.

If a company does not meet any of the thresholds set for micro-entities, small or medium, or is ineligible (e.g. a public company), they are considered a large company and must prepare and submit full accounts to Companies House.

Are Financial Accounts public?

If a company is public, large or medium-sized then Financial Accounts will be publicly available at Companies House. 

For example, here is the filing history of HSBC: Companies House HSBC LIMITED filing history.

Why do insurers request the Financial Accounts of your customer/buyer?

Credit insurers assess the financial health of a company, comparing the information to prior year accounts, as part of their risk underwriting process.  

Insurers can also be approached by smaller companies and micro-entities that file abridged accounts. In such cases, the insurer may request that the buyer/customer provides this information on a confidential basis or may seek to contact the customer/buyer themselves to request the full accounts. Financial Accounts of this nature are always treated confidentially, and the details of the accounts will not be disclosed to the policyholder, insurance broker or any other insurer.

What do Management Accounts include?

Like financial accounts, management accounts are also a set of financial statements. There is no legal requirement or set criteria for what should be included in management accounts. Instead, the contents are dictated by what the directors, management or shareholders need to see. As a result, management accounts vary from company to company and industry to industry.

That said, it is common to include:


A budget predicts income and anticipated expenses for a business within a defined period. It offers insights into planned revenue sources and expected expenditures. You can find more information about business budgets on Investopedia.  


A cashflow statement shows cash inflow and outflow from operating, investing and financing activities. It provides a detailed breakdown of where cash is generated and utilised, facilitating an understanding of a company’s monetary movements.

Balance Sheet

A balance sheet is a snapshot capturing the financial position of a business on a specific date. It details the monetary value of assets, liabilities, and equity. This guides stakeholders in assessing the company’s worth and financial stability.

Profit & Loss

A profit and loss statement details revenues, expenses, and net profit or loss during a specified time period. This provides a clear picture of a company’s profitability and operational efficiency. A profit and loss statement is also known as an income statement. In your Company Tax Return, it is used to work out UK corporation tax. 

Do you need Management Accounts?

Management accounts are essential financial reports for monitoring the performance of a business and day-to-day/strategic decision-making. They give business owners, investors, and other stakeholders the information they need to make the right business decisions.

The information is produced on a monthly or quarterly basis, providing up-to-date insights into the financial health and progress of a business.

Why do credit insurers request Management Accounts?

We are often asked why credit insurers request up-to-date Management Accounts, especially as it is not a legal requirement to file the accounts or make the information public for private companies. 

Financial Accounts are useful in providing a historic view of the financial health of a business. However, the information only serves as a snapshot. 

Insurers are assessing the risk of buyers on a day-to-day basis. As a result, it is common for risk underwriters to request Management Accounts, allowing them to make an informed assessment of the current financial performance of a business. 

As with Financial Accounts, Management Accounts provided to the insurers are confidential, and the contents or assessment of the accounts will not be disclosed to the policyholder or other parties. 

How COVID affected filing dates

In 2020, the pandemic led to the UK Government extending the filing deadline for Financial Accounts. This means that many of the most recent Financial Accounts predate the pandemic, providing little insight into how businesses were affected by lockdowns. 

Any accounts prepared (other than under FRS105 for Micro companies) are required, if signed after 25th March 2020, to include a Coronavirus impact statement. In the current economic environment, Management Information/Accounts have become increasingly important to allow insurers to make an informed assessment of the ongoing financial progress of a business.

Fincred, your financial partner

If you have any questions regarding one of your customers or would like a free non-obligation assessment of the financial health of your top 10 customers, then please contact one of the FinCred team on 01732 749750 or info@fincred.co.uk