What is a BWA and how should my company use it?

The business management evaluation provides a compact overview of key operational accounting figures. But, there are some pitfalls. When reading and interpreting a BWA, it can be easy to draw the wrong conclusions from the data.


Don’t know where to start? We’re the market leader in helping international entrepreneurs in Germany. Let us be your guide.

Tailored tax advice BWA Guidance free consultation


What is a BWA?

BWA is short for betriebswirtschaftliche Auswertung – a monthly business management evaluation of financial accounting data. It provides entrepreneurs with a compact overview of the most important key figures on the earnings position of a business. In other words, it’s a short-term profit and loss statement.

It’s the go-to business analysis used to make a basic assessment of a company’s current situation – for both internal and external readers. To use the report properly, it is crucial to evaluate the appropriate figures, as there are many different types of BWAs.

You can read in more detail how double-entry bookkeeping works in Germany here.

Who prepares a BWA?

Every BWA is based on data from financial accounting. Proper accounting provides the data needed to create a BWA. Tax advisers or auditors carry out the evaluation of this data with the help of software.

Is it compulsory to prepare a BWA?

No company is legally obliged to prepare the BWA. The regulations on the obligation to keep accounts, which are derived from the HGB (commercial code) and the AO (fiscal code), are separate from this.


Which companies are the BWA suitable for?

The BWA is particularly suitable for small and medium-sized enterprises (SMEs) that have to do double-entry bookkeeping. A BWA can only be realised with proper accounting.


What are the different types of BWA?

The inventor of the BWA and, conveniently, the provider of most of the BWAs produced in Germany is the company DATEV.


The standardised evaluation is completely independent of the size and type of company. It is suitable for companies that want to analyse key figures detached from their industry or legal aspects with a focus on business management aspects.

Can’t deal with the most complicated tax system in the world?
Avoid the pitfalls of the German system here 

Erweiterte BWA (extended BWA)

Since their introduction, DATEV and other service providers offer many extensions to the standard format, such as:

  • BWA mit Branchenbezug (BWA with sector reference, e.g. for tax advisers, auditors, lawyers)
    • Adjusted to the respective professional group or economic sector
    • Legal particularities are taken into account
  • Controllingreport-BWA (controlling report BWA)
    • Combines the short-term income statement with the cash flow statement
    • Cash flows determined derivatively
    • Values from cash flows that do not belong to cash and cash equivalents are assigned to other accounts in the financial accounting
    • Differences between reported and actual cash flows
  • Qualitäts-BWA (Quality BWA)
    • Suitable as evidence of creditworthiness
    • Completion of missing accrual postings
    • Contains a typical bank correction list
  • Kapitalflussrechnung-BWA (Cash Flow Statement BWA)
    • Presentation of the origin and use of liquid funds
    • Cash flows vs. cash balances
    • Values from cash flows that do not belong to cash and cash equivalents are assigned to other accounts in the financial accounting
    • Differences between reported and actual cash flows
  • Gesamtkostenverfahren-BWA (Total cost method BWA)
    • Structured according to the profit and loss account scheme (GuV)
    • Evaluation contains all important profit and loss items
  • Umsatzkostenverfahren-BWA (Cost of sales method BWA)
    • Structured according to the profit and loss scheme
    • Evaluation contains all important profit and loss items
    • Similar to total cost method BWA and can be used as a supplement
    • Contains specific cost accounts for application of the cost of sales method
  • Einnahmen-Ausgaben-BWA (Income-expenditure BWA)
    • Preliminary business result (Einnahmenüberschussrechnung, or income surplus statement)
    • Determination of profit according to § 4 para. 3 EStG
    • Calculation according to inflow and outflow principle
    • Actual operating income (plus VAT) vs. actual operating expenses (plus input tax)
    • Result is not valued
    • Suitable for freelancers and tradespeople who use the income surplus statement

Each form of business evaluation has been designed to tailor accounting information to the diverse needs of readers.


How is the BWA structured?

As touched on before, the preparers distinguish between different formats. Standardised BWAs, however, always follow the same scheme.

How is the standard BWA structured?

A BWA is always structured in staggered form. The evaluation is divided into several areas and their subordinate items. The structure is based on the items of the profit and loss account (GuV). Normally, the following areas are shown in the BWA:

  • Revenues (Umsatzerlöse)
  • Gross profit (Rohertrag)
  • Cost types (Kostenarten)
    • Personal
    • Material
  • Interest expense (Zinsaufwand) or interest income (Zinsertrag)
  • Taxation (Steuern)
  • Operating profit before interest and taxes (EBIT)


How can entrepreneurs use the results of a BWA?

Exactly how useful the data from the BWA is, depends entirely on the reader. Different conclusions can be drawn depending on the intended audience of the analysis. The most common applications of the BWA are briefly summarised here.

Overview of the short-term profit situation (kurzfristige Ertragslage)

The BWA provides a compact overview of the current earnings situation, which can also be used for a general sector comparison. However, this is only possible if the BWA format is the same as that of the competition.

Proof for third parties

Banks and other credit institutions often demand BWAs. Landlords of commercial or private rental properties may also want to see a company’s most recent BWA before agreeing to anything. The data serves as proof of a positive financial situation and positions a business as a less risky proposition.

We want to help all entrepreneurs get ahead
Digital bookkeeping is a great place to start

What does a BWA show?

The BWA should ideally answer the question: How did my company do last month? But, this question cannot be answered for every company because the informative value of the BWA depends on which type of BWA you use as well as how a company is structured.


What does a BWA hide?

The standard format is always without commentary and must be interpreted by the reader him or herself. This is precisely where problems can arise because the figures only provide an excerpt of the company-relevant figures from financial accounting. To avoid possible misconceptions, DATEV offers different variants of the BWA, each of which is tailored to different needs.

A standard BWA only provides information on the profitability of a company but omits many items relevant to business management and how they were accounted for. You should always be aware of this selective presentation of key figures.

In monthly financial accounting (FiBu), all transactions subject to turnover tax, wage tax and social insurance are recorded. The aim is to simultaneously meet the legal requirements for proper bookkeeping as well as for the correct and timely payment of taxes. In a nutshell, financial accounting’s objective of being able to derive key business figures from it.

From a business point of view, its financial accounting evaluations are often incomplete and meaningless. In fact, making decisions based solely on financial accounting data may have detrimental consequences.

BWA misconceptions: An example

In a retail business, the BWA showed a cumulative surplus of €140,000 as of August. Considering the turnover, this is a good result. And, the customers’ payment behaviour was very good. So at first glance, there was no reason to worry. A little later, the company had to file for insolvency! What did the BWA conceal?

While at the beginning of the year, there were goods worth €200,000 in the warehouse and the business premises, by the end of August all the goods had been sold. So there was a reduction in stock worth about €200,000, which reduced the result of the end of August by this amount. However, this change was not visible in the BWA because it had neither been recorded nor posted. The supposed surplus of €140,000 shown in the BWA was actually a loss of €60,000.

Key business figures that go beyond a BWA

The standard format cannot provide some relevant business indicators:

  • Cash flow and liquidity development
    • Loans (Darlehen)
    • Current accounts (Kontokorrente)
    • Equity development (Eigenkapitalentwicklung)
  • Forecast data on profit (Gewinn) or solvency (Zahlungsfähigkeit)
  • Divisional results
    • Profit centre
    • Profitable and unprofitable business areas
    • Top and bottom retail products

All these variables underpin well-informed corporate management. But, it requires looking at more than just the figures from classic financial accounting. In addition to the BWA, evaluate far more meaningful key figures, such as data from preview and profit centre reports as well as data from financial controlling methods.


BWA samples and templates

Want to see what a BWA looks like directly from the software provider? DATEV offers an overview of the most common formats in a PDF [Download].


How to make a BWA meaningful

The spectrum of entrepreneurship is huge. There is no one-size-fits-all all evaluation that does justice to every business. The prerequisites of financial accounting must be right for the business management evaluation to be meaningful.

Posting expenses and revenues promptly

Expenses and revenues with a significant impact on the result in financial accounting must be taken into account promptly during the year.

Depending on the industry and business model, this can affect very different items. For craft enterprises and in the manufacturing industry, inventories of work in progress and finished goods are of great importance. For trading companies (Handelsunternehmen), inventory changes are a mandatory part of monthly accounting. This way you can avoid drawing wrong conclusions like in the example above.

Additional posting of items that influence results

Other major anticipated expense items should be accrued monthly if they could (in the aggregate) have a significant impact on the monthly operating result. Said items include but are not limited to:

  • Monthly depreciation (Abschreibung)
  • Income taxes (Ertragssteuern)
  • Annual bonuses to customers
  • Bonuses received from suppliers
  • Loans (annuities split into interest and repayment part)
  • Prepaid expenses (Rechnungsabgrenzungsposten)



How useful a BWA is depends on several factors:

  • Financial accounting entries
  • How the BWA is formatted
  • What kind of business you have

Tips for entrepreneurs

  1. Think carefully about which format is best suited to your business before making a product choice.
  2. Clarify with your accountant which items should be posted during the year and always as soon as possible to make your BWA more meaningful.
  3. Bear in mind that the standard format does not contain all key business figures.
  4. Consult a variety of reports used for business and financial controlling before making any major decisions.


Want to know more?

Accounting regulations

Master List

Continue browsing