Which degrees are helpful for entrepreneurs

Double-entry bookkeeping / accounting for companies

The accounting in detail

In double-entry bookkeeping, profits are determined by comparing the business assets at the beginning of the year and at the end of the year.

  • Opening balance: Make a list of assets and debts on the opening day (establishment of the company). To do this, you need to take an inventory
  • Closing balance: At the end of the financial year, there is another inventory to determine the assets.

The business assets are determined in the opening and closing balance sheets as follows:

  • Business assets = (fixed assets + current assets) - debt.

The profit for the financial year is then derived from the business assets in the opening balance sheet less business assets in the closing balance sheet. The balance sheet items are compared with the accounts. The balance sheet and the related income statement form the annual financial statements.

In principle, it is advisable - if you are not well versed in bookkeeping yourself and have enough time - to consult a tax advisor.

Year-end costs

Chart of accounts for double-entry bookkeeping

The structure of a balance sheet depends primarily on the legal form and size of a company. The posting of business transactions is always the same on two sides: namely on the debit side and the credit side. On the one hand, the use of funds is recorded and, on the other hand, the source of the funds. With double-entry bookkeeping, these two sides must always be balanced.

According to § 238 HGB, the entrepreneur must keep records of his activities. The double-entry bookkeeping is intended to reflect all commercial transactions and all assets. The name double-entry bookkeeping is derived from the recording of all business transactions in two books. These books are:

  • the land register or journal and
  • the general ledger or the general ledger accounts.

In addition, there are sub-ledgers for double-entry bookkeeping, which support the general and land registers in recording all business transactions. An example of a subledger is the stock ledger. With double entry, all incoming and outgoing goods are recorded in the stock ledger. The sub-ledgers for double-entry bookkeeping also include, for example, the cash book, the payroll or the current account and business friend book, in which the liabilities and receivables are listed.

The land register serves the chronological order of all business transactions for double-entry bookkeeping. All processes are recorded here with date, number, receipt and amount and posted to the account and contra account. Incoming and outgoing invoices as well as the cash books are typical land registers in double-entry bookkeeping.

The main ledger is used to keep things in order. Closing all G / L accounts from the general ledger results in the balance sheet. In order to ensure proper double-entry bookkeeping, a general agreement has been reached on the so-called standard framework of accounts for short SKR. In addition, IKR industrial accounts and joint accounts are used for double-entry bookkeeping in the general ledger.

A simple example of a booking record is helpful in order to be able to present double-entry bookkeeping better:

  • A due invoice for 200 euros is paid by the customer as follows. He pays 50 euros by bank transfer and 150 euros are brought over in cash.
  • Posting rate: bank account 50 euros, cash box 150 euros to receivables 200 euros.
  • This increases the liquid assets (bank account and cash) on the assets side of the balance sheet, while the receivables are reduced by the same amount.

Further information on retention requirements

  • Organize your filing with bank receipts, receipts, incoming and outgoing invoices and business mail in a clear manner
  • A retention period of 10 years applies to most documents (in particular for documents relating to the balance sheet, inventory documents and invoices and receipts).
  • There is also a 6 year deadline for other documents such as business letters.

Double-entry accounting support

With double-entry bookkeeping, bookkeeping programs are definitely suitable for recording business transactions. In many bookkeeping programs, the booking records are entered once and then automatically recorded simultaneously, making double bookkeeping less error-prone when recording business transactions.

Author: Für-Gründer.de editors

As editor-in-chief, René Klein has been responsible for the content of the portal and all publications by Für-Gründer.de for over 10 years. He is a regular interlocutor in other media and writes numerous external specialist articles on start-up topics. Before his time as editor-in-chief and co-founder of Für-Gründer.de, he advised listed companies in the field of financial market communication.