Accounting consists in recording, in cash, and sometimes in terms of quantity, properly documented economic events that cause changes in the assets of the managing entity and its sources of origin. In the article we will see the concept of books of accounts are kept on the basis of accounting vouchers, they record records of events in a chronological and systematic order. They include sets of accounting entries, turnover and balances, which constitute: a journal, general ledger, subsidiary ledgers, statements of: turnover and balances of general ledger accounts and balances of subsidiary ledger accounts, as well as a list of assets and liabilities
Who needs to keep full accounting?
Entrepreneurs are required to keep an appropriate form of accounting in accordance with the type of activity they conduct. Simplified accounting means personal responsibility, no separate legal personality and equity. Full accounting is a more developed and complicated way of keeping records of our company. Such records include the company’s revenues and costs, the condition and property of the entire enterprise, including equipment, goods, account balance and cash. As I mentioned above, it is a complicated accounting system, but it is also accurate and thus reflects the company’s financial situation in the most authentic way.
What form of billing?
The regulations do not impose the type of accounting and settlement methods with the tax office. From my own experience, I will add that some forms should be used in your company, although most can only be done. It is important to define our enterprise at the beginning, because some forms of accounting are possible to a certain degree of development, while others are not. The basis is the fact that natural persons, civil partnerships of natural persons, general partnerships of natural persons and partnerships are required for this type of settlements, provided that their income for the previous year amounts to a minimum of EUR 1.5 million. This means that if the revenues do not reach such values, full accounting is not required and another form of settlement can be used.For a new entrepreneur, the transition to full entrepreneurship can be a big challenge as it is very complicated.
Accounting alone or with an accounting office?
For this reason, it is recommended to hire an accountant going to a professional accounting office. If we make any mistake in the books, its effects can have a strong impact on our company. Full accounting is the most detailed and precise way to settle any monetary value as soon as it appears in our company. Thanks to this, the information collected during the records perfectly shows the financial condition of our company. Full accounting also supervises the inventory, i.e. the records of property and sources of its financing, it is also a great source of information for entrepreneurs. This is clearly visible on the example of large companies that have many sources of financing.
Thanks to meticulous records, we can see all changes taking place in the company’s body, as well as observe the trends that are coming.Full accounting also requires a report that mainly shows financial movement. For example, what were the profits intended for or where were they obtained from. As for the staff, full accounting offers salary cards, thanks to which we settle the expenses incurred for employing the appropriate staff. Thanks to this, we are able to create a statement of how the quality of work performed by one employee compares to the costs of his / her maintenance. We constantly talk about full accounting as a necessary evil, and in the meantime there are some advantages. Of course, many companies voluntarily choose full accounting, because thanks to it the management is able to create a huge database of information about all financial processes that take place in the enterprise.Each company has appropriate departments that mainly deal with budget and tax policy, and it is such departments that most often use the above-mentioned cost and income records.
If we decide to hire an accounting office, because full accounting is too complicated for us, we can count on such an office to prepare an inventory of our assets and liabilities. These are indicators that testify to the financial condition of our company. So full accounting has the task of recording every even the smallest movement of money in our company, and for this it is used to settle taxes. The entire accounting can be divided into: determination of the financial year, determination of reporting periods, valuation of liabilities and assets,determination of the financial result as well as the method of bookkeeping by the above-mentioned rented office.
So how do you settle your taxes?
In summary, if we do not predict that our income will exceed EUR 1.5 million, we can use other forms of tax settlement. If one of us exceeds this limit, then we only have full accounting. Thank you for your time and interest in my article. I hope that, at least to some extent, I have broadened your knowledge in accounting matters, and the information contained in the article will be useful for you when opening a business.