Step by step
Everyone who starts up a business must keep an administration. If you register with the tax authority or the Trade Register, you may receive a visit from the tax authority. Setting up and maintaining good administration is not only necessary for checks by the tax authority, but also means that you always have a clear view of your own financial situation. It also saves time when you have to do your tax returns.
You will find ready-made accounting programmes on the internet. Decide whether you need an accountant to do your tax returns. Make sure that all your accounts have a separate place or file. We present an example below.
Setting up accounts
File all (till) receipts for amounts you pay in cash or with a bank card by date. These expenses must relate to your profession. Not all costs are tax-deductible.
Incoming invoices are bills that you (the creditor) have to pay.
Outgoing invoices are the invoices that you send to your clients (debtors).
You are not required to open a separate bank or giro account for your business, but it is a good idea. That makes it easier to keep private and business expenditure separate.
Only save important mail such as confirmations of appointments made with clients or third party offers, letters with important dates or deadlines: in short, anything that you might need again at a later date. You should also keep copies of business letters that you send yourself. If you send the same letter to different people in a mailing, keep a sample letter and a list of the addressees.
This could include contracts, order confirmations and other important agreements with clients.
Make sure that you keep all important mail on insurance contracts in one place. Common business policies include legal aid policies, liability insurance for professional practitioners and businesses, business contents and building insurance and disability insurance.
The tax authority may ask to see diaries and agendas during an inspection. You should therefore keep a record of the hours that you and any fiscal partner spend on your business. This can include the time you spend on doing accounts, promotions, research, study, performances, etc. Some tax-deductible items depend on the number of hours that you spend on your business.
This can be as simple or as detailed as you feel you need. It could be an address book, a diary or card file, on paper or in a computer database. If you start with a large database, think of which information you want to enter and which information you want to be able to select.
You are required by law to save your accounts for seven years. You do not have to have everything immediately to hand, so at the start of each calendar year, store away the contents of files that you will not need in the coming year.