I’m not a fan of micro herbs. I find them irritating and pretentious and they get in your teeth.

Micro accounts on the other hand are definitely a good thing for some people. The accountancy profession has been very busy over the last year getting used to changing regulations for company accounts large and small. Some of the most important affect the very smallest of companies reducing the cost of compliance by an enormous amount.

So if you are the owner or director of a small company you can take advantage of these changes. The basic requirements are very straightforward.

If you meet just two of the following criteria in a financial year, then you have the opportunity to prepare and publish simpler accounts:

1. your company’s turnover is under £632,000
2. your balance sheet total is under £316,000
3. your average number of employees in the year was 10 or less

As you would expect there are a number of exceptions-PLCs, partnerships, LLPs, charities et cetera

What’s more, if you qualify as a micro entity this year but go over the balance sheet thresholds next year, then there is no need to worry. Once your company qualifies as a micro entity in one year you can still prepare micro entity accounts even if you go over the balance sheet limit in the subsequent two years.

So, what are the benefits?

Your financial statements can reveal a lot about the company and believe it or not, they may even hold the key to your competitive edge. The new legislation was introduced with a clear vision in mind: to make financial accounts simpler and more condensed for smaller businesses. I have found that the key features include:

• A much simpler balance sheet (with no need to provide a breakdown of the key balance sheet figures)
• A simpler profit and loss
• Exemptions from preparing a director’s report
• No need for any notes to the accounts.
• Only the balance sheet needs to be filed at companies house, any further disclosures are optional, so you can disclose far less than in current small company accounts
• Continued benefits of the audit exemption 

The amount of information that you need to submit to Companies House will reduce significantly, keeping more of your company’s financial information out of the hands of competitors, which might prove crucial for you and your business!

Without the need to publish any notes to the accounts there is no need for any disclosure of related parties, dividends or accounting policies.

Are there any downsides?

It would be wrong to say that publishing micro entity accounts is the only option, and consequently it is really important to think about whether it is right option for you and your business. Because simplicity is the key, adoption of the rules can actually prevent a company presenting its accounts in the most beneficial way. An example is showing revalued amounts for assets and buildings. Many companies like to include assets at a revalued amount as it can improve the position of the company’s balance sheet. This option is not available under the micro accounting regime.

Perhaps you have credit agencies and lenders regularly reviewing your financial statements? If this is the case, you should consider whether the reduced disclosure regime will be sufficient for their needs. If in turn your creditors begin to request further information this may prove costly and slow.

The micro entity status is undeniably a huge opportunity for small companies to take advantage of the reduced disclosure regime. Crucially, with the option of publishing abbreviated accounts now being taken away this is now the only way a qualifying company can prepare a simpler set of accounts.

I would be inclined to ask whether the company really needs a 12 page set of accounts? Who will really benefit from publishing excessive company information on the public domain?