Proper bookkeeping refers to the adherence to legal principles in keeping books and records. The aim is a complete, correct, timely, and understandable documentation of business transactions.
Basics
Proper bookkeeping means that business transactions are systematically recorded, clearly documented, and made traceable through supporting documents. The basis is ongoing Financial accounting as well as – in the case of accounting companies – the Double-entry bookkeeping.
The focus is on traceability and verifiability: an expert third party must be able to trace the business transactions within a reasonable time.
Legal framework
The requirements arise from commercial and tax law provisions for bookkeeping and record-keeping. For electronic procedures, requirements for regularity are specified by administrative provisions.
Relevant to practice: For digital bookkeeping, documentation, traceability of processing steps, and proper safekeeping of receipts are particularly important.
Systematic classification
Proper book-keeping is the basis for accounting compliance and is directly related to:
It also forms the basis for the Annual financial statements and for exams, for example, a Company audit.
Core requirements
- Complete recording of all business transactions
- Correct, clear, and understandable bookings
- Evidence principle: Bookings must be verifiable by means of receipts.
- Proper storage of documents
- Understandable processes in digital systems
Typical procedure
- Recording of business transactions and documents
- Coding and accounting
- Documentation of processes and access routes
- Archiving and Retention
- Ongoing checks (e.g. plausibility and reconciliation checks)
Practical relevance
Proper bookkeeping is a prerequisite for reliable evaluations (e.g. BWA) and for structured preparation of final reports. The better the ongoing bookkeeping is organised, the more efficiently reconciliations and closing preparations can be carried out.
Typical sources of error
- Incomplete documentation or missing document linkage
- Unaccount
- Unstructured storage and unclear access rights in digital archives
FAQ
Who is obligated to keep proper accounts?
Companies that are legally obliged to keep books and records must do so properly.
Does regularity also apply to digital receipts?
Yes. Digital receipts must be processed and stored in a way that ensures they remain traceable and auditable.
What role does documentation play?
Documentation ensures that processes, responsibilities, and processing steps are traceable.
Conclusion
Proper bookkeeping is the foundation for accounting compliance. It ensures that business transactions are demonstrably documented, documents are properly stored, and evaluations and closing work can be carried out on a reliable basis.
Brasser Accounting Solutions GmbH is a specialised accounting service provider and part of a corporate group with Quint GmbH (tax consultancy/auditing) and Service Place Årjäng AB (Swedish tax office). BAS exclusively performs services according to § 6 No. 3 and 4 StBerG and does not provide tax or legal advice.
