Simple accounting – tasks, and result
In simple accounting, individual accounts (rubrics) are set up for the various business transactions, for example, for rent payments and the purchase of office supplies, etc. The entries and exits (bookings) are logged in these accounts in chronological order. In addition, they enter the entries of bank accounts and cash register (cash). A cash book is suitable for the listings.
At the end of the financial year, entrepreneurs compare the initial and final assets and determine the company’s success quickly and easily. On which pillars the success is based cannot be determined in this way, however. The simple bookkeeping serves the determination of profits and is suitable as a basis for the preparation of the annual financial statement and the income surplus calculation (EÜR).
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For whom is the simple accounting?
The simple accounting is recommended for small businesses, for example, for freelancers and sole proprietors with an employee.
For accounting by means of the income surplus calculation (EÜR) are traders without merchant characteristics and with an annual turnover of fewer than 600,000 euros and a profit of fewer than 60,000 euros.
Simple accounting is only permitted for companies that are not required to keep accounts. All other companies have to determine their annual profit in the context of double-entry bookkeeping through the profit and loss account (P & L).
What is not recorded?
Neither debts nor business assets are recognized. The simple accounting does not take into account the value of machines, materials, the bank balance, and no existing receivables. Only an inventory can be used to determine the total operating assets. Even over several years deductible acquisition costs are not considered. These include, for example, the company car or the new notebook. A fiscal registration of these assets takes place only as an operating expense with its depreciation volume. For a comprehensive overview of assets taking into account debts and depreciation, it is, therefore, advisable to work with a tax consultant or to use accounting software.
The simple accounting as a basis for the income surplus calculation
The simple accounting is suitable as a forecast for business development, but not for submission to the tax office. The tax office expects of self-employed a revenue surplus bill. You can fill out the official form with the information from the simple accounting department and send it electronically by means of a form to the tax office.
Tips for the practice
For easy administration of the simple bookkeeping, a cash book available in the stationery trade is suitable. Even more practical is a cashbook software, the Sage blog informs in detail about the benefits. Accessibility and plausibility checks make work easier and help to avoid mistakes. All invoices must be collected, more overview is achieved with separate invoice folders for customers and suppliers. Important: No booking without a voucher. Revenues and expenses must be verifiably recorded, numbered receipts and invoices help.