Changing an Accounting Reference Date

You may shorten an accounting period as often as you like, but you may not extend an accounting period within five years of the end of a period you have extended previously, except in unusual circumstances (e.g the Secretary of State has directed this, or the company is subject to an administration order, or the company is aligning its accounting reference date with that of a subsidiary or parent undertaking established within the European Economic Area.)

Company Benchmarking

Measuring the performance of an organisation against that of its competitors.

Company's Constitution

Every company has a memorandum of association, which determines its name, where its registered office may be situated and what it may do (its objects).

The rules for the conduct of the company's internal affairs are contained in its articles of association. There is a standard form for the articles (in the case of a company limited by shares known as Table A), but this may be modified.

Continuous Improvement

Ongoing improvement of business processes.

Cost of Sale

Also known as variable costs, direct cost. These are the costs that are directly incurred when you sell your product, or service, for instance stock in a retail shop, plumbing materials for a plumber, bricks, sand and cement for a builder. They also include materials purchased for resale, raw material, work in progress and subcontracted labour used to produce the items for sale. These costs are deducted from your sales figure to arrive at a gross profit.


This is the process of calculating what it costs you to run a business and should include all the direct costs of buying in your materials, stock and subcontracted labour in order to build your business (direct costs) plus the overheads associated with running the business


These are people, or companies, that you owe money to as a result of carrying out your business. They may have issued you with an invoice or you may have incurred the debt (e.g. telephone, gas, etc) before you receive the invoice, or bill.


Copyright gives the creators of a wide range of material, such as literature, art, music, sound recordings, films and broadcasts, economic rights enabling them to control use of their material in a number of ways, such as by making copies, issuing copies to the public, performing in public, broadcasting and use on-line. It also gives moral rights to be identified as the creator of certain kinds of material, and to object to distortion or mutilation of it. (Material protected by copyright is termed a "work".)

However, copyright does not protect ideas, or such things as names or titles.

The purpose of copyright is to allow creators to gain economic rewards for their efforts and so encourage future creativity and the development of new material which benefits us all. Copyright material is usually the result of creative skill and/or significant labour and/or investment, and without protection, it would often be very easy for others to exploit material without paying the creator.

Most uses of copyright material therefore require permission from the copyright owner. However there are exceptions to copyright, so that some minor uses may not infringe copyright.

Copyright protection is automatic as soon as there is a record in any form of the material that has been created, and there is no official registration or form or fee. But creators can take certain steps to help prove that material is theirs.

Cash Flow

The movement of cash in and out of a business. Cash is usually required to pay a company's bills and commitments.

A company with negative cash flow has less cash coming in as receipts than going out in payments. Negative cash flow can bankrupt a business that may actually be running profitably.

Certificate of Incorporation

The company's 'birth certificate' as issued by Companies House on the day of incorporation.


A loan taken out by the company, usually against some form of security. The satisfaction of secured charges should be filed by the Company Secretary but very often this is overlooked.

Collection Period

How long, on average, a company takes to pay its' debts.

Companies House

Companies House is an executive agency of the Department of Trade and Industry, and has five main functions: . the registration of new companies; . the registration of documents required to be delivered under companies, insolvency and related legislation; . the provision of company information to the public; . dissolution and striking off companies from the register; . ensuring that companies comply with their obligations in connection with the above functions.

Company name

As registered at Companies House. Only one company can hold this name at any one time. A company can change it's name at any time, unlike it's number which is permanent.

County Court Judgement

A CCJ is an order from a County Court that the company must pay an outstanding debt.

When settling debts companies often overlook notifying the court so a judgement may appear unsettled when the debt has actually been paid.

Current Ratio

The Current Assets divided by Current Liabilities. If greater than 1 then assets are greater than liabilities, less than 1 then liabilities are greater than assets. A very useful indicator, especially of cash flow. See also Liquidity Ratio.

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