Running your own business also comes with several responsibilities. This includes, for example,accounting, bookkeeping, which is made up of various sub-aspects. The associated tasks can go hand in hand with an enormous organizational effort and take up time. We have put together the most important accounting bookkeeping tips so that you can concentrate fully on your core business. Among other things, it is about the legal framework and the sensible use of digital tools.
Check the legal requirements for entrepreneurs.
In the form of small business regulation, the effort for bookkeeping can be minimized. However, small businesses have upper limits concerning the annual taxable turnover of 17,500 euros for the previous year and 50,000 euros for the current year. By applying to the responsible tax office, you avoid the obligation to pay sales tax and therefore do not have to submit a corresponding advance notification. Furthermore, as a small business owner, you can gain a competitive advantage because your customers do not pay sales tax. There are also numerous differences to be observed when it comes to bookkeeping obligations: as a self-employed freelancer, for example, simple bookkeeping is sufficient to comply with legal obligations. However, other rules apply to traders, so double-entry bookkeeping is often unavoidable. Ideally, you should seek individual advice to select the form of bookkeeping that is right for you.
Use digital tools to relieve yourself.
Especially in the initial phase as an entrepreneur, accounting seems like an insurmountable obstacle. However, with good organization and a structured approach, the processes can be optimized in a targeted manner. Basically, it is important to avoid the classic paperwork with countless receipts and invoices. For this purpose, the software is recommended in which all documents can be entered, sorted, and archived digitally. In this way, you save a lot of time and nerves in professional accounting. In addition, private and business expenses should be strictly separated. For this project, it is necessary to set up a business account to make all the necessary entries. Our tips on all aspects of bookkeeping are rounded off with simplified cash accounting. The associated administration can be implemented quickly and easily with a digital program. You can find more information about the relevant software directly from the manufacturer.
Final conclusion on the subject of accounting
Overall, it can be said that bookkeeping is not rocket science and can be mastered easily with the tips listed. From taking advantage of relaxed legal requirements to using innovative software, various measures need to be taken. It is always advisable to seek expert advice to be on the safe side legally if in doubt. If you implement all the tips presented, nothing stands in the way of optimized accounting. The most important tips can be found in the following overview:
Review of the small business regulation
Clarify bookkeeping requirements (single or double?)
use practical software
Digital accounting – an opportunity for small business owners
Small business owners are well acquainted with digital businesses in their own niche, but digital accounting remains a foreign word for most small business owners. The digitization of your own bookkeeping and the associated processes bring significant simplifications.
Definition of a small entrepreneur
If an entrepreneur has decided to apply the small business regulation and meets the relevant legal requirements, he may issue outgoing invoices to his customers without VAT. In return, however, he is also denied input tax deduction.
The concept of the small business is regulated in § 19 UStG. According to this, sales tax owed for sales is not levied if the sales plus the applicable tax did not exceed EUR 17,500 in the previous calendar year and are not expected to exceed EUR 50,000 in the current calendar year.
Insight into the previous accounting process of a small business owner
A typical small business owner creates outgoing invoices in Excel or Word, converts them to PDF, and sends them by email or letter to their customers. All incoming invoices received by email are printed out and handed to the tax consultant with the pendulum file. This procedure is not only old-fashioned but also no longer corresponds to the principles of proper accounting (GoBD).
Problems with a small business owner’s old-school accounting:
The manual invoicing process is very time-consuming and no longer up-to-date.
Printing out the incoming invoices received by email is harmful to the environment and time-consuming.
Current profit determination must be done manually
No access to the receipts after handing over the pendulum file to the tax consultant
Impact of Accounting 4.0 on the small business owner
Digitizing the bookkeeping of a small business owner brings clear advantages.
Creation of outgoing digital invoices
The outgoing invoices are not created manually in Word but in accounting software or in a user-friendly invoice creation program in digital accounting. These are transmitted to the tax consultant via an interface. Furthermore, after the invoice has been created, this outgoing invoice can be sent to the customer by email at the push of a button.
Digitizing incoming invoices
All incoming invoices sent by email are automatically sent to the tax consultant’s accounting program. As a result, the incoming invoices in PDF no longer have to be printed out. All paper receipts received are photographed using a mobile phone camera and uploaded to the associated app’s accounting program. After creating an expense account, the invoice amount is automatically posted to the corresponding expense account. Through the OCR, the information from the document is read by the software and assigned to the correct creditor and expense account.
Archiving of documents in compliance with legislation
After the introduction of the GoBD, all outgoing invoices must not be subsequently manipulable and must be archived and stored in a certified data center. A certified accounting program and invoicing program should be selected to meet these legal requirements.
Since all receipts are kept in one place, there is another advantage, as a small business, that you can quickly access all incoming and outgoing invoices for the past, even retrospectively.
Easy payment of vendors
If a small business owner has decided to link his bank account to an accounting program that automatically imports all incoming invoices from the email inbox, payments can be made easily.