Almost every company you sell to files accounts, and almost none of them file the accounts you were hoping for. There is usually no turnover figure, no profit line, and no explanation. What arrives is a balance sheet and a handful of notes.
That is still enough to answer the questions that matter commercially, if you know what the gaps mean and stop looking for numbers that were never going to be there.
Start with the size, before you read a figure
How much a company has to disclose depends entirely on which size bracket it falls into, so the first useful fact is which set of rules it filed under. That is stated on the accounts themselves.
For financial years starting on or after 6 April 2025 the thresholds are a good deal higher than they had been for over a decade. A micro-entity is a company meeting two of three tests: turnover no more than £1 million, a balance sheet total no more than £500,000, and no more than 10 employees. A small company meets two of turnover no more than £15 million, a balance sheet total no more than £7.5 million, and no more than 50 employees. Medium runs to £54 million, £27 million and 250. There is a separate gross basis with slightly higher figures for groups.
The filing category tells you which reporting regime the company used. It does not establish an exact turnover, and the size tests need to be read together.
Compare the reporting category across years, but check for changes in thresholds and eligibility rules. A change in category alone is not proof of growth or contraction.
What a small set of accounts actually contains
Small and micro companies may file abridged or filleted accounts, which in practice means the balance sheet and some notes, without the profit and loss account and often without a directors' report.
The balance sheet gives you fixed assets, current assets, creditors falling due within one year, net current assets, creditors falling due after more than one year, net assets, and capital and reserves. The notes usually give average employee numbers and sometimes a breakdown of debtors and creditors.
That is a photograph of one day in the year. It says what the company owned and owed on its year end date, and nothing whatsoever about how it traded to get there. Everything below is about reading a photograph.
The four lines that answer commercial questions
Net assets show the difference between the recognised assets and liabilities at the reporting date. Book values do not establish what would be recovered in a sale. Read the figure with the notes and the company's circumstances.
Compare current assets with liabilities due within a year. The ratio can prompt questions about liquidity, but a figure above one does not prove the company can pay on time. The nature of the assets and timing of cash flows matter.
Fixed assets give context about the operation. A sharp change is worth investigating in the notes, since purchases, disposals and accounting adjustments can all affect the balance.
And creditors falling due after more than one year, which is longer term debt. Read this alongside the charges register, because a large long-term creditor with a matching charge tells you who has security over the assets and therefore who gets paid first if things go badly.
Read three years, never one
A single balance sheet is close to meaningless without context, and this is the mistake almost everyone makes.
Compare the same balance sheet lines across several years. Changes can identify questions about financing or liquidity, but do not support a reliable prediction of when reserves will run out or a customer will stop paying.
Employee numbers in the notes are the other useful series. Headcount falling while assets hold steady is a business cutting cost. Headcount rising sharply is one that has just taken on commitments, which means it needs revenue and is probably buying things.
Getting round the missing turnover
You cannot see revenue in small company accounts, so the practical question is what to use instead. Three proxies do most of the work.
Headcount and fixed assets can provide rough context about operating scale. A micro-entity category does not impose a definite turnover ceiling because the company needs to meet two of the three size conditions. Avoid presenting an estimated revenue band as a filed fact.
Combine those with the SIC codes, the registered address and the number of directors and you can usually place a company within a band that is good enough to decide whether to spend an hour on them. It will not be good enough to set a credit limit, and it was never going to be.
The dates matter more than people think
A private company files within nine months of its accounting reference date. So a set of accounts you read today can describe a year that ended twenty months ago and was signed off eleven months ago.
That lag is the single biggest limitation on this whole method, and it is why accounts belong in your assessment rather than being your assessment. Anything that has happened since sits in the more recent filings: a new charge, a director resignation, a change of registered office, a confirmation statement showing a change of control, or the absence of accounts that were due last month.
Read the accounts for the shape of the business. Read the recent filings for what is happening now. Neither substitutes for the other.
Signals worth acting on
Some patterns are common enough to be worth naming.
A rise in fixed assets alongside a charge may suggest a financed purchase. Check the notes and document dates, then confirm whether there is a requirement for related services.
Falling net assets and increasing short-term creditors warrant closer review. Check recent payment experience and discuss any concerns before deciding whether the agreed terms remain appropriate.
A first set of accounts gives you historical information to assess. It does not by itself establish the current scale or commercial prospects of the business.
And a dormant company suddenly filing trading accounts is a business that has just started operating. Those are rare and they are worth a phone call the week you see one.
Where to read them, and what it costs
Nothing. Every set of accounts filed by every UK company is free to view and free to download on the Companies House register, with no account and no subscription, going back years. The same information is available through the free API if you would rather query it.
A good deal of what credit reference agencies sell is these accounts, scored. The score is genuinely useful and it is a summary of the same public filings plus payment data the agency has collected. The accounts underneath are yours to read for nothing, and reading them yourself is how you notice the things a score compresses away.