Many companies have to do the accounting every month to show it to the tax office. This includes, for example, the account assignment and accounting for incoming and outgoing payments. This also includes advance tax returns, invoicing and dunning; usually the larger companies have accountants to do this for them. Freelancers or small businesses sometimes also ask a tax advisor. But the company usually does at least part of the work independently. And this is exactly where the preparatory accounting has arrived.
What is preparatory accounting?
According to electronicsmatter, the preparatory accounting is relatively simple: The documents are sorted chronologically so that the tax advisor can be given a “work package” in this way. The preparatory accounting also includes the cash report without account assignment and the account statement if bank accounts are available. These are administered alone. The company also creates invoices, reminders and inventories on its own.
What is no longer part of preparatory accounting?
The postings themselves, the account assignments, wage matters, balance sheets, financial statements and similar things are then no longer part of the preparatory accounting. These are taken over by the accountant or the tax office. Of course, it is also possible to have the preparatory accounting done externally. However, there are costs that can be saved.
Why do you assign invoices?
Account assignment means that documents are classified in expense and income accounts. Numbers on the invoices and receipts show how the receipts are assigned to the account. The receipts prove the correctness of a booking and must be kept for ten years.
There are two categories of posting documents: external documents (also external documents) such as invoices from suppliers, bank documents, account statements and credit memos, as well as internal documents (including own documents). This includes the copied outgoing invoices, wage slips, payrolls and booking instructions. Replacement receipts that replace missing originals also fall into this internal category.
The account assignment takes place in three steps: After the receipt is entered with the date or receipt stamp, the chronological sorting takes place and then the check is carried out to determine whether the invoice is factually and mathematically correct. If everything fits, the receipt can be posted.
The preparatory accounting in detail
Now some tasks have already been presented that the company can do itself in the course of the preparatory accounting. But what does this work look like in detail? The following is a brief overview including more detailed explanations:
The pre-sorting of receipts
Even in the smallest company there is always at least one account statement. There is also a receipt for each payment process that can be seen on the account statement. These are, for example, written invoices, invoices from suppliers and wage payments. The first step in order to be able to save the tax advisor is to sort the documents directly behind the appropriate account statement. So the individual sheets of the account statements are filed and the receipts sorted behind them. There are hardly any tax advisors who do not want at least this work to be done by the company itself.
The assignment of the booking accounts
An accountant always uses so-called posting accounts. This means nothing less than that there is always a predefined and permanently assignable account number for different account types. This consists of four digits and is the chart of accounts refer to. It is seldom the case that they have six digits, for example in the construction industry. Many smaller companies only need a few such booking accounts. The tax advisor can usually memorize these numbers at some point, because they rarely differ from client to client. If you write down the appropriate account numbers in the cash books, on account statements and on printouts as a company, you can save more time for the tax advisor and thus money. You can get the list of account numbers from your tax advisor. Anyone who knows a little about accounting now knows that the next step would be to book everything yourself.
Enter amounts alone
Accountants, be it tax consultants or their assistants, record all invoice amounts and types of costs with the help of software. If the amount has been correctly assigned to the appropriate number, the software automatically calculates the correct tax rates. The result is, among other things, the advance sales tax returns, which are created automatically.
Basically, you can also make the bookings yourself. It’s not that difficult as the costs involved are repetitive. These include, for example, telephone charges, rent and salaries. There are various accounting software that offer templates for precisely such postings; these can then simply be used again and again. There is also an automatic mechanism for invoices with which companies generate their profits, which automatically creates the open items in the accounting department when the invoice is printed. So if you have a little left with a little time and concentration, you can really do a lot of accounting yourself.
Discuss the preparatory accounting with the tax advisor
So there are different activities involved in preparatory accounting. For example, sorting and filing of receipts, checking account movements, writing invoices, dunning, keeping cash books as well as incoming and outgoing invoice books. The preparation of travel expense reports is also part of the preparatory accounting.
Individual documents are sorted according to whether the company needs the annual balance sheet or whether an income-surplus-account should be created. The aim of the preparatory accounting is that the tax advisor is given receipts and documents that have already been processed, sorted and checked.
The detailed tasks that the tax advisor sees as preparatory accounting must and can be discussed individually. So it is not a problem to speak openly about whether a part of self-work can save costs. Companies can save a lot of money every month.
Separate preparatory accounting and tax advisor
If you do not want to take on the preparatory accounting yourself, but also do not want to hire tax consultants, you can hand over both tasks to different service providers. A service provider then takes care of the preparatory accounting, which many companies actually do themselves. You then collect the sorted documents and send them to the tax advisor. The advantage of this solution is obvious, because companies can save themselves a lot of work in this way. It may also be possible to save money with it because no additional labor has to be hired; the disadvantage is that there are of course costs that could actually be saved. So everyone has to weigh for themselves whether it makes sense for their own company,
What does preparatory accounting cost?
A not insignificant question is how high the costs of the preparatory accounting are. A general answer to this question is not possible. It therefore makes sense, as with any other service, to compare costs with one another – but, here too, this does not differ from other services, one should not only pay attention to the price. The quality of the work should be good, the tax advisor must also be able to work with the documents afterwards. Another question is, of course, whether the preparatory accounting should take place nearby or whether the documents can also be sent by post. Questions that everyone has to think about for themselves in order to find an answer for themselves.