Independent accounting - step by step

Service Business

Entrepreneurs more and more often decide to conduct their own accounting, thus reducing the costs of their business. However, when deciding to run the company's accounting on its own, an entrepreneur must remember a few basic things. What kind? We explain below.

Reporting activities to CEIDG

Establishing a business requires the submission of a CEIDG application. In this application, the entity that will be responsible for keeping the company's accounting should be indicated. In this matter, the taxpayer can choose from:

  • outsourcing the company's accounting to an accounting office,

  • employing your own accountant,

  • independent bookkeeping.

Usually, large companies that employ a significant number of employees decide to hire their own accountant or set up an accounting department in the company. However, this is very costly and may not be financially feasible for many companies.

Bookkeeping on your own is much cheaper and therefore can be tempting for many entrepreneurs. In addition, smaller companies with revenues below 1.2 million euro can use simplified procedures, which significantly simplifies accounting.

In connection with the above, if the entrepreneur decides to conduct their own accounting, then when filling in the CEIDG form, the fields where the information about the entity responsible for accounting settlements should be left blank. Alternatively, it is also permissible to enter your company's data. In this way, the entrepreneur informs the competent institutions about keeping the accounts independently.

Independent bookkeeping - advance income tax payment

If the entrepreneur intends to keep the accounts on his own, he should first of all read the revenue and expense ledger (KPiR). In most cases, it is the basis for calculating advances for income tax.

KPiR is used to record individual economic events in the company. It includes:

  • revenues obtained from sales and other revenues that are not directly related to the conducted activity,

  • purchase of commercial goods and basic materials,

  • other costs related to running a business.

At the end of each month, every entrepreneur should make a printout of the entries made in a given month. This printout should be prepared in accordance with the template set out in Annex 1 to the regulation on keeping a tax book of revenues and expenses.

Registration for VAT

It should be borne in mind that some types of activity are exempt from VAT registration. Others, on the other hand, must necessarily be registered as an active VAT payer. Therefore, after setting up a business, it is important to obtain information whether a given type of business is exempt from VAT, or whether it has an absolute obligation to register for VAT.

Independent bookkeeping and the proper accounting program

An entrepreneur who makes the company's settlements on his own should have an appropriate accounting program. This program will enable you to reliably fulfill your accounting obligations. Therefore, you should choose a program that will be intuitive and easy to use for the taxpayer.

A professional accounting program should enable the keeping of such documentation as:

  • VAT registers - in the case of taxpayers registered as active VAT payers,

  • records of fixed assets and intangible assets,

  • vehicle mileage records (mileage) for VAT purposes.

In most cases, accounting documents should be kept for at least 5 years - counting from the end of the tax year in which the income tax payment deadline expired.

Responsibilities to keep in mind when you keep accounting on your own

Independent accounting is associated with obligations that the entrepreneur must remember himself. The monthly duties related to running a business include:

  • payment of advances for income tax,

  • submission of VAT returns and payment of the tax amount to the competent tax office (in the case of VAT taxpayers),

  • payment of social security contributions,

  • printing and storage of a tax revenue and expense ledger.

At first, bookkeeping on your own can seem quite complex and demanding self-discipline. However, an entrepreneur who once uses this form of accounting with the tax office will certainly benefit from it. Independent bookkeeping contributes to the increase of awareness of your own company.

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