Step-by-step plan setting up accounts
Everyone who starts up a sole proprietorship must set up accounts. Setting up and maintaining accounts 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.
On this page
1. Accounts and cash receipts
Set up your accounts in Excel (or use another program available). You can use a way that fits your company. Be aware that your accounts are the basis for all your declarations. Besides that, the Tax Authority should be able to check your accounts in a reasonable amount of time and of course it should be complete.
File all (till) receipts for amounts you pay in cash or with a bank card by date and put them in your accounts. If you only want to keep your administration digitally: take a photo of your paper receipts and include it in your administration. These expenses must relate to your profession. Not all costs are tax-deductible.
2. File incoming and (copies of) outgoing invoices
Incoming invoices are bills that you (the creditor) have to pay. Outgoing invoices are the invoices that you send to your clients (debtors).
3. File all bank statements
You are not required to open a separate bank or giro account for your business, but it is a good idea. It makes it easier to keep private and business expenditure separate and easier for the Tax Authority to check your accounts.
4. File correspondence
Only save important correspondence such as confirmations of appointments made with clients, third party offers or correspondence with important dates or deadlines: in short, anything that you might need again at a later date. You should also keep copies of business correspondence 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 addresses.
5. File agreements/contracts
This could include contracts, order confirmations and other important agreements with clients.
6. File insurance policies
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.
7. Keep a record of hours worked
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.
8. Keep track of your asset depreciation
If you buy business assets that last longer than one year and that are more expensive than €450, you write them off over several years. Think of a laptop or other expensive equipment. This means that you cannot deduct those costs from your profit in one go/in one year. You cán reclaim the VAT on that purchase at the next VAT return. Write down in which year you purchased which business asset, what the value is and in how many years you will deduct the costs excluding VAT from your profit.
9. Save your accounts
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. On paper or digitally.