Every company needs financial accounting
Bookkeeping for the self-employed: find important topics, helpful software and tax advisors
What is the bookkeeping?
In the bookkeeping, among other things, all payments such as income from sales, expenses for raw materials and supplies or the servicing of liabilities are recorded. Investments and the associated depreciation also fall into the field of bookkeeping. Particularly with regard to income and expenses, comparisons between individual months, quarters or financial years can then be made over time.
The fundamentals of bookkeeping are largely subject to tax law constraints. In principle, all corporations, merchants and companies that operate an independent trade are required to keep accounts. So-called non-merchants such as sole proprietorships or the GbR are exempt from the accounting obligation if the profit does not exceed EUR 60,000 or the turnover does not exceed EUR 600,000 per year.
Even sole traders whose sales revenues in two consecutive financial years were below the threshold of 600,000 euros or who generated less than 60,000 euros in annual surplus are excluded from the accounting obligation. Furthermore, freelancers as well as companies from the forestry and agriculture are not subject to the accounting obligation. Different accounting principles apply to them than to large companies.
Double bookkeeping or EÜR?
Of course, the exemption from the accounting obligation cannot release any self-employed person from properly documenting his income and expenses. For example, according to the EStDV §60 (4), freelancers have to record their payment flows in an income-surplus-invoice (EÜR). Furthermore, potential business partners such as banks want to gain a precise overview of the business situation of the young company in order to be able to make a decision in favor of overdrafts or loans for expansion investments that may arise. For these reasons alone, it makes sense for every self-employed person to keep a proper bookkeeping after the establishment.
In addition, the bookkeeping provides every start-up or entrepreneur with an overview of all important business transactions. From the bookkeeping you can see how the company's cash and cash equivalents are, what sales have been made with which business partners within a certain period of time, which receivables are still open or which liabilities are still to be paid.
Entrepreneurs who are declared as non-merchants according to Section 242 of the German Commercial Code (HGB) due to their activities, sales or profits have the option of registering in the commercial register. An entry is worth considering in any case, as it improves the reputation of your own company and you appear professional and serious towards your contractual partners. In the course of this entry, however, the entrepreneur is required to keep accounts.
If an entrepreneur does not dutifully comply with the principles of bookkeeping, the tax office can set a tax estimate. As a rule, a tax estimate then leads to a higher financial burden for the young entrepreneur.
If the entrepreneur has decided on a legal form of a corporation, he is obliged to have his annual accounts checked by an auditor in addition to the bookkeeping according to certain criteria. However, this inspection requirement is only required for corporations with a very high balance sheet total (approx. 4 million euros) and a high annual turnover (approx. 8 million euros) and with more than 50 employees.
There are numerous software solutions that can help you with bookkeeping. Test the online accounting from Unternehmerheld free of charge and without obligation.Try online accounting for free
Bookkeeping before establishment
The fundamentals of bookkeeping also include the fact that bookkeeping begins before the company is founded. Because you can claim costs that are incurred in connection with your self-employed activity before the start-up as business expenses after the start-up. How to reduce the taxable profit in the first financial year. To do this, however, you need to properly collect and store all receipts.
Immediately after the establishment: Post from the tax office
Before you even start your actual bookkeeping, you will receive mail from the tax office after registering your company. This includes the so-called questionnaire on tax registration. We explain point by point which information has to be provided: Find out more about the questionnaire on tax registration.
The tax number is also closely linked to the questionnaire on tax registration. You will receive this after returning the questionnaire to the tax office. You need the tax number for writing invoices. As an alternative to the tax number, you can also apply for the sales tax identification number. This is especially important if you want to send invoices abroad. Learn more about:
Online tax advice: do your bookkeeping conveniently online. A tax advisor is also available on site if you wish.Find a tax advisor
What accounting principles apply to me?
When it comes to the fundamentals of bookkeeping, a distinction is made between single and double bookkeeping. Simple bookkeeping is only permitted for so-called non-merchants. Non-businesspeople include small businesses, freelancers, foresters, farmers and business people with a turnover of less than 600,000 euros in two consecutive financial years and a profit less than 60,000 euros per year. All other self-employed persons are required to keep double-entry bookkeeping.
Simple accounting according to the EÜR
In simple bookkeeping, the usual cash flows are recorded in orderly accounts. Receivables and liabilities are not recorded in simple bookkeeping after the establishment. The simple bookkeeping is evaluated by the tax office using a so-called revenue surplus invoice (EÜR). Appropriate software for bookkeeping supports the self-employed in creating the bookkeeping. However, the self-employed should be familiar with the basics of bookkeeping.
- If sales and profits are below EUR 600,000 or EUR 60,000 per year and the company is not entered in the commercial register (sole proprietorships, small businesses, GbR), a simple income-surplus-account (EÜR) is sufficient to set up an income-surplus account.
Double-entry bookkeeping after incorporation
In double-entry bookkeeping, all business transactions are posted to multiple accounts. According to the fundamentals of bookkeeping, the posting follows either on the debit or on the credit side. It should also be noted that with double-entry bookkeeping, each branch has its own systematic booking directory, the so-called chart of accounts. The creation of the required account classes and account groups is no trivial matter in double-entry bookkeeping. A corresponding software for bookkeeping can only have a supportive effect here. In the case of double-entry bookkeeping after the foundation, a simple knowledge of the fundamentals of bookkeeping is no longer sufficient.
- Double-entry bookkeeping / accounting must be carried out by all companies that are entered in the commercial register. It also applies to all companies that exceed the thresholds specified for simple bookkeeping. There is an exception for the registered merchant - he can also draw up an income-surplus-calculation below the threshold values.
The 20 most common questions about bookkeeping
As you have already learned above, the bookkeeping is basically the orderly recording of all business transactions of a company - seamlessly, chronologically and objectively sorted with the help of receipts. But how do you, as a young entrepreneur, keep records, flawlessly and in accordance with all regulations? We have compiled the answers to the most frequently asked questions that arise around the topic of bookkeeping for newly founded companies:
1. What is depreciation?
Deduction for wear and tear - this definition is hidden behind the abbreviation AfA. But what exactly does that mean in detail? For example, if you operate a food truck or are equipped with a MacBook Pro as a freelancer, only part of the purchase price of the purchased asset is taken into account in your profit calculation and thus in the taxes to be paid for the current financial year. Rather, depreciation is made in the bookkeeping over the useful life of the acquisitions.
The service life and thus the annual depreciation amount are determined on the basis of the depreciation tables of the Federal Ministry of Finance. Learn more about the rules for depreciation in the accounting.
2. What are retention periods and how long do they apply?
The financial year is coming to an end again, finally you can shred paid invoices, old documents and accounting records. Unfortunately no, mucking out is only on the agenda in 10 years. Now it's time to sort well. Many documents must have a retention period of up to 10 years in order to be directly available for a tax audit, for example.
3. What happens during a tax audit?
This section is arguably one of the least popular when it comes to bookkeeping. In order to check whether the bookkeeping in your company is carried out correctly, the tax office commissions a tax audit, which you should not underestimate under any circumstances. In order to be well prepared for this, you can ask your tax advisor to help you put together all the necessary documents. The examiner will either visit you or all relevant documents will be submitted - which is certainly preferable. And even if you definitely don't want to read it - the auditor will usually always find something: from discrepancies in the cash book to missing hospitality receipts. In most cases, there is an additional tax payment.
4. What is the business evaluation?
After the end of the month, you will receive the business analysis from your tax advisor. Do not just carelessly put this with your other documents, because it is worth taking a closer look, after all, the evaluation provides a good overview of your operational company development. The BWA is also essential for bank lending.
5. What is the long-term extension all about?
We've all done it once: returning borrowed books from the library too late. Some libraries have been accommodating to a phone call and a nice apology and have granted an extension of the deadline. The same principle applies to the monthly advance tax return at the tax office. Without a permanent extension of the period, you must submit the advance VAT return by the 10th of the following month - the VAT will then be collected a few days later. With a permanent extension, you have one month longer in accounting.
6. What is accounts receivable?
Have your customers paid all their bills? Or have you already received a repeated reminder? If you cannot answer these questions quickly and without a lot of effort, liquidity problems quickly arise. Accounts receivable is basically nothing more than a constantly updated list of open items and a standardized procedure for dealing with defaulting payers.
7. What should you watch out for in the tax registration questionnaire?
You will be sent a questionnaire on tax registration right in the start-up phase - the extensive mail from the tax office will certainly put a damper on your founding enthusiasm. But the questionnaire is linked to numerous other bookkeeping issues and the determination of possible tax prepayments. So that you don't have to spend too much time with these formalities, we have prepared step-by-step instructions for you to create the questionnaire for tax registration.
8. What does GoB mean?
The so-called principles of proper accounting are hidden behind the abbreviation GoB. This means that an expert third party can get an overview of the business transactions and the economic situation of your company within a reasonable period of time - keyword tax audit. Your bookkeeping must therefore not have any defects and must meet the legal requirements. The commandments of the GoB include:
- Business transactions are to be posted promptly and continuously
- No posting without receipt
- Proper storage of accounting records
9. Do I have to keep a logbook?
If you want to claim a company car or business trips with a private car for tax purposes, you have to keep a logbook about it. Because the tax office wants to know in detail when you went where. Until some time ago, it was still necessary to record it by hand. In the meantime, however, there are electronic logbooks that make your work much easier. As an alternative to the logbook, the so-called 1% rule can also be used to set off the company car.
10. Do I have to keep a cash book?
Here it is very clear: yes, no ifs or buts. The tax office does not tolerate black coffers. Instead, entrepreneurs who have a cash register must also keep a cash book. As with the above-mentioned logbook, strict regulations apply.
11. What information should be included on a small amount invoice?
Finally good news: for invoices that do not exceed an amount of 250 euros, you have to provide significantly less mandatory information than you would otherwise for an invoice. The following information is sufficient for small amount invoices:
- Full name or correct company and full address of the supplier
- Date of issue of the document
- Quantity and type (= customary description) of the delivered items or the scope and type of other services
- Payment amount and tax amount for the delivery / other service in one sum
- Relevant tax rate, possibly reference to a tax exemption.
12. When is the small business regulation worthwhile?
The small business regulation is intended to relieve small businesses of bureaucracy. Specifically, the self-employed who make use of the small business regulation do not need to register in advance for sales tax. Accordingly, no sales tax is to be shown in invoices. However, only founders who plan less than 22,000 euros in sales in the first financial year can vote for the small business regulation.
13. What is part of payroll accounting?
The tasks of payroll accounting not only include monthly payroll accounting, but also the correct registration and deregistration of employees. Fortunately, most tax advisors offer a low-cost, full service for payroll accounting.
Do you need help with payroll accounting? We will find the right partner for you.Find Payroll
14. What must be on an invoice?
A milestone for every founder is the first invoice - and (hopefully) the first receipt of payment. But of course there is a catch here too: namely, all kinds of mandatory information that must be included on a proper invoice (from the tax and invoice number to the correctly reported sales tax). Our tip: The popular offers for invoice software offer very good support for the creation of invoices.
You will find an infographic below for the mandatory information that must be included on an invoice. You can download this with further information with a click.
15. Payment reminder or reminder?
The customer doesn't pay? Then measures must be taken promptly. This includes the payment reminder as well as the reminder. The friendly preliminary stage to the reminder is initially the payment reminder. However, you could also send reminders directly. In the interests of good customer relationships and especially if the customer otherwise pays on time, the payment reminder is the first step.
The reminder, on the other hand, signals to the defaulting customer that you mean business and would like to have the outstanding invoice settled immediately.
16. SKR 03 or SKR 04 - what are the differences?
These terms come from double-entry bookkeeping and describe accounts.These serve to present the accounting of a company as clearly as possible and to design the accounting uniformly. The different charts of accounts are usually the same in terms of the type and size of the accounts, but they differ significantly in their structure:
- SKR 03 (structured according to the business processes of retail, banking and insurance)
- SKR 04 (structured according to the structure of a balance sheet)
17. Target or actual taxation?
When does the sales tax that is shown on your own invoices have to be paid to the tax office? This is what the question of target versus actual taxation is all about. In the worst case, you have to transfer the sales tax to the tax office before your customer has paid the bill. This is the case with target taxation. It is better for your liquidity if you choose actual taxation. Then the sales tax is only due when the customer has paid. But be careful: not everyone can apply the actual taxation.
18. What is a SuSa?
SuSa is the abbreviation for sums and balances list. This list summarizes the G / L accounts posted with the opening balance, movements and closing balance. The most important thing for your everyday office life: the totals and balances list gives you a brief overview of your company's account movements since the beginning of a year.
19. What does the VAT return include?
It would have been too nice: Unfortunately, you are not allowed to keep the sales tax on your accounted invoices, but have to pay them to the tax office. How high the amount is must be determined monthly as part of the advance VAT return. The input tax, i.e. the sales tax that is shown on the invoices that you have received, is offset.
20. What is the so-called input tax?
As already briefly explained, input tax refers to the sales tax that you pay on invoices received. For example, for the copier you bought or renting the office space. The input tax will be reimbursed to you by the tax office as part of the advance VAT return.
No business start-up without accounting
As you can see, there is no getting around clean bookkeeping when starting a business. This is the only way to keep track of your company's assets, debts and success. Small mistakes are made quickly that can lead to serious consequences - especially with regard to the tax office and the social security funds. Even “newbies” will not forgive these mistakes, there is no puppy protection at the tax office. Therefore, take care of correct bookkeeping right from the start and save yourself anger and stress.
In addition to the basic questions of bookkeeping, we have put together numerous other topics from bookkeeping in a very extensive section on bookkeeping. Also note other special topics such as:
As editor-in-chief, René Klein has been responsible for the content of the portal and all publications by Für-Gründer.de for over 10 years. He is a regular interlocutor in other media and writes numerous external specialist articles on start-up topics. Before his time as editor-in-chief and co-founder of Für-Gründer.de, he advised listed companies in the field of financial market communication.
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