Accounting yourself: what does it involve?

Service Business

Currently, many entrepreneurs, in order to reduce costs, decide to conduct their own accounting. Read the article below and find out what to keep in mind when you become your own accountant!

Step 1 is reporting to CEIDG

When setting up his own business, the entrepreneur should first of all determine who will be responsible for accounting settlements. He has a choice of an accounting office, hiring his own accountant or independent accounting.

Large enterprises with many employees and with full accounting should bear in mind that this involves additional responsibilities. Thus, it is worth thinking about your own qualified accountant. However, for financial reasons, this may prove difficult to implement.

In the case of a sole proprietorship, keeping your own accounting seems extremely tempting. Especially when it substantially reduces the monthly costs of running a business. In addition, in smaller companies, accounting does not have to be that complicated. If the entrepreneur does not obtain income at the level of EUR 1.2 million, then simplified procedures will apply.

Thus, when filling in the CEIDG form, the future entrepreneur leaves a blank field next to the data of the entity responsible for settlements (or enters the data of his company in it). This is information for officials that the entrepreneur conducts his own accounting.

Step 2 is to get acquainted with the basis for calculating income tax advances, i.e. the Book of Income and Expenses

The Book of Revenues and Expenses (KPiR) is a document that is used to record individual economic operations related to the company. In short, it records:

  • revenues, including sales or other revenues,

  • purchase of commercial goods and basic materials, as well as other incidental costs related to these purchases,

  • other costs related (directly or indirectly) to the activity.

 

Important!

The following entities are required to run the KPiR:

  • natural persons who obtain income from non-agricultural business activity, who have chosen general rules or a flat tax as a form of income taxation,

  • general partnerships of natural persons, civil partnerships of natural persons, partnerships whose net revenues from the sale of goods, products and financial operations for the previous financial year did not exceed the Polish currency equivalent of EUR 1,200,000.

 

At the end of each month (no later than by the 20th day of each month for the previous month), entrepreneurs should prepare a printout of entries made for a given month in accordance with the book form specified in Annex 1 to the Regulation on the conduct of the CCP.

Step 3. check when (and if at all) you need to register as an active VAT payer

Polish tax law gives entrepreneurs the choice whether to become an active VAT taxpayer or to benefit from the exemption. Hence, it is worth considering, first of all, whether the types of activities performed were provided for in the Act as those exempt from VAT. It should be remembered that sometimes regulations impose an absolute obligation to register as an active VAT payer.

Step 4. choosing the right accounting program

Entrepreneurs who keep their own accounts should look around for an appropriate accounting program that will allow them to reliably fulfill their obligation to keep accounting records, such as:

  • VAT registers (if they are registered as active VAT payers on the VAT-R form),

  • equipment records,

  • records of fixed assets and intangible assets,

  • vehicle mileage records for VAT purposes and separately for income tax (if required to do so).

Generally, accounting documents should be kept for a minimum of 5 years, counting from the end of the tax year in which the income tax payment deadline to which they relate has passed.

On the other hand, the monthly duties related to the conducted activity include:

  • payment of advances for income tax,

  • submission of a VAT declaration and payment of tax to the Tax Office account (in the case of VAT payers),

  • payment of social security contributions,

  • printing KPiR.