Bookkeeping for the GmbH: DIY or get a tax adviser?

Should you do the bookkeeping for your GmbH (limited company) or hire a Steuerberater (tax adviser)? Can a layman do bookkeeping? Does using accounting software make sense? This article weighs the pros and cons of the different company accounting options.


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Should I do the bookkeeping for my GmbH myself?

It is a widespread belief that one can save tax adviser costs by handling the bookkeeping of a GmbH or any other type of company oneself. But does this really make sense, and does it actually result in cost savings for the business?

Our article provides all the information you need to support your decision-making process.


What are the bookkeeping compliance requirements in Germany?

All GmbHs must use the doppelte Buchführung (double entry bookkeeping) method and prepare a Jahresabschluss (a company’s annual accounts, a year-end financial statement).

Bookkeeping compliance requires every receipt and invoice to be filed, organised and stored digitally using a proper methodology. Failure to do so means a company (or tax adviser) won’t have the basic information to get an overview of the accounting figures.


Bank statement record management

Sort your bank statements chronologically in folders so that the most recent is always on top.

Individual statements usually consist of several sheets. Make sure that sheet one is always at the bottom and that the most recent sheet is always at the top.

Also include the receipts for the account movements. This way, the bookkeeping is easily understandable for everyone.


Cash receipt record management

Recording cash receipts is also a necessary part of bookkeeping. You don’t need to have a cash register, but you do have to organise all the company’s recents chronologically.

If there is a cash register, a Kassenbuch (cash book) must be kept. All cash transactions must be listed in the bookkeeping and the receipts must be kept.

Please note: A negative balance is not possible here, as it is a cash balance that can be either 0 euros or more. Also, it’s a good idea to keep “clean accounts” by keeping your private matters separate.

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What’s your bookkeeping strategy?

Deciding between doing the GmbH’s bookkeeping in-house or contracting a tax adviser to do it depends on want you want to achieve.

Is your bookkeeping only a matter of compliance, or do you also want to develop a strategy to save on tax? And, do you want to save as much money as possible on overheads?

In the long run no matter how you answer, engaging a tax adviser is how you achieve all these things.

The services of a qualified tax adviser is, in fact, the more sensible solution for a GmbH’s bookkeeping if saving money or taxes or both.


GmbH bookkeeping compliance

The legally prescribed tax obligations in bookkeeping include, for example, the Umsatzsteuer-Voranmeldung (advance turnover tax return) or the Jahresabschluss (annual/EOY accounts).

These tasks should be given particularly high priority, as you can get into big trouble with the tax authorities if you miss deadlines or fail to meet your obligations properly.


How can I use bookkeeping to reduce tax for my GmbH?

In order to weigh up all the options on how to save tax, you should definitely consult a tax adviser, as many savings opportunities and tax advantages are difficult for the layperson to understand. Many supposed savings can have a negative effect elsewhere on the balance sheet. It is therefore best to consult your tax adviser on which options are optimal for your GmbH.


Time is money

Never underestimate the value of your own working time. It is one thing to file and record receipts, but many entrepreneurs often think they’ll save a lot of money if they buy tax software instead of contracting a tax adviser. Yet, unless the entrepreneur has a background in accounting, this will still take a lot of time to do. An experienced tax consultant does the same workload in a fraction of the time and more accurately.

The Master list of all Accounting articles can be found here.

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