LLP accounts

We have now used Silverfin to produce a number of LLP accounts and it is now ready for wider use. Detailed guidance is set out in Teams ( here - LLP guide v2). This uses the Silverfin base guidance and expands upon it to include more helpful guidance on coding and Chart of Accounts references. There is also a detailed sheet showing the exact coding used for the Members Reconciliation of Interest here. There is also additional help for LLPs that are used to simply own property here and here

The LLP accounts production workflow is based upon the FRS102 1A accounts production workflow, including the functionality to meet the requirements of the LLP Statement of recommended practice (SORP) and Companies law applicable to LLPs. Whilst the workflow should be familiar for any used that is using Silverfin for company accounts and partnerships, the inclusion of members and slightly different regulations does complicate the process, especially around the Reconciliation of Members Interests. We would highlight the following:

  1. Firstly, it is worth contrasting this template to partnerships. For LLPs, the accounts do not include an analysis of current and capital accounts by partner – instead they are focused on analysing amounts due to/from members between Equity and Debt. As such, Silverfin for LLPs does not contain the same level of detail of analysis of balances by members/partners. In addition, many of our LLPs (often property owning entities or solicitors) have a large number of members, often > 15 which is the maximum we have set up Silverfin for as this covers 95%+ of our partnership clients. As such, this leads to a slightly different approach:
    1. all relevant current, capital, debt and equity accounts should be mapped to one main Silverfin nominal ledger code (they are separated by using the .000,.001 suffixes). This allows Silverfin to then compile most of the Reconciliation of Members’ Interests.
    2. Then all supporting analysis by individual member should be prepared in Excel (as we currently do). Note – as Silverfin Documents storage of Excel and Word documents does not allow schedules to be updated, these schedules of individual ambers should be created and stored in M Files until the file is ready for review and then ready for completion.
  2. The Reconciliation of Members Interests is the hardest part to get right given the different permutations that are allowed for in LLP accounting. The mapping into this table is fairly complex, so as well as the code lists in Appendix 1 of the LLP Guide (mapping from Chart of Accounts to LLP accounts), we have included in Appendix 2 a mapping going from the Reconciliation of Members’ Interests to the Chart of Accounts. These detailed notes on which codes should be used for which part of the Reconciliation and the spreadsheet linked above sets these out in the style of the actual Reconciliation - if you follow these carefully, you should end up with the numbers in the right places.
  3. The Property guide (here) is useful for non-property LLPs as a starting point if you are unfamiliar with the process.
  4. The format of the profit and loss account for LLPs is similar to the standard FRS102 1A format with the key difference being the inclusion of the line item “Members’ remuneration charged as an expense” (mapping codes 70015 to 70018). This appears after the profit for the year and represents Members’ salaries and other contractual remuneration. The correct posting for this expense, which is often used for the entire profit for the period and therefore a “dummy” double entry often taken to suspense in client’s records, is:
    1. DR 700150 (Director remuneration which is treated as Members remuneration in LLPs)
    2. CR 320200 (the correct line/position in the Reconciliation of Members’ Interests reconciliations
  5. The Reconciliation of Members' Interests does pose some formatting challenges for Silverfin given the larger potential number of columns and rows. We are still working with Silverfin on this, but for the moment we are keeping this to one page and you can select Export bundle “Accounts - LLP (Smaller font)” if you need to shrink the table to fit onto one page.
  6. The SORP also requires that the year-end Debt/Other Amount balance is split between amounts due to members and amounts due from members. The format copies the one set out in the LLP SORP. and this may vary slightly from our previous accounts. There is one specific complexity here in disclosing balances owed to/from members, and it seems we do have certain client types (mainly property owning LLPs) where it is possible to have a complex mix of debtors and creditors. If drawings, profit and other nominal ledger movements are coded separately from the current accounts, this prevents Silverfin from actually properly splitting the final current accounts. It does not know for each member, whether the final balance is a debtor / creditor. As such, in many cases you may either:
  • Manually enter either the drawings/profit and other movements into the Reconciliation Of Member Interests; or
  • Recode the drawings/profit shares, etc and manually enter the final split between balances owed to/from members.

If the opening split between to/from is not correct you may not have copied the template data form the previous year where it can be corrected (if needed) directly. From our testing it does seem that this table does need careful handling with rounding errors more possible than in other areas. This is understandable given we are compiling data from many different n/l codes. As such, we recommend this is carefully cross checked at the end of any assignment before accounts are sent to the client.

Small LLPs
We note that for most of our small LLPs we can exclude the Reconciliation of Members' Interests from the statutory accounts but provide a simplified versions separately to our clients if they request it.
When the LLP is set as small in the 'General Settings' reconciliation the Reconciliation of Members' Interests is automatically removed from the list of reconciliations.  If we want to produce the Reconciliation of Members' Interests for the client then
  1. manually add to the accounts workflow (3) by activating the Reconciliation of Members' Interests from the Overview reconciliation in the accounts workflow
  2. You can create a separate PDF of the Reconciliation of members interests by selecting the Export bundle “LLP - Reconciliation of Members Interests” OR
  3. You can create a bundle to include the Reconciliation of Members Interests at the end of the Accounts bundle with a header that marks it as “This page does not form part of the financial statements”, then select Accounts – LLP (Small) from the Export bundle list  N.B. The LLP (small) export should only be used when the Reconciliation of Members' Interests is required but not to be filed.
  4. Once complete, remove the Reconciliation of Members' interests by un-starring from the workflow.
To ensure that the Reconciliation of Members' Interests is removed from the accounts prior to filing, we have included an extra reconciliation in Workflow 3 (“FC Accounts Validation”) that checks to see if the LLP is small that the Reconciliation of members interests is not starred and included in the final accounts.
There are circumstances where we are required to file the Reconciliation of Members' Interests for small LLPs.  In this case the reconciliation can be activated as above however the 'FC Accounts Validation' check will remain unreconciled.  This will result in the accounts workflow not being at 100% when the accounts are filed.  This is acceptable in the small number of scenario where this is required.