If a business transaction has been posted, the accounting obligations are not yet completed. According to tax and commercial law, companies must comply with certain legal retention obligations and periods. For example, the principle of “no booking without a receipt” applies. But many receipts and documents can also quickly fill up a company’s archives. Therefore, it should also be checked once a year whether documents can be disposed of.
Disposing of documents
With the turn of the year, it is again a good idea to take a closer look at the archives and provide relief.
Observe retention periods
The deadline is six or ten years, depending on the document. For example, the following documents must be kept for ten years :
- Books and records,
- Inventories
- Annual accounts
- Management reports,
- the opening balance sheet as well as the work instructions and other organisational documents required to understand it,
- Accounting documents
- Documents referred to in Articles 15(1) and 163 of the Union Customs Code
- Bills
§ 147 para. 4 AO states: “The retention period begins at the end of the calendar year in which the last entry in the book was made, the inventory, the opening balance sheet, the annual financial statements or the management report were prepared, the commercial or business letter was received or sent or the accounting document was created, furthermore the record was made or the other documents were created.”
Example: Entrepreneur A prepares the 2010 annual financial statements in 2011. The retention period is ten years. From 2022, the 2010 annual financial statements can generally be disposed of.
The following must be kept for six years:
- Commercial or business letters
- other documents insofar as they are relevant for taxation.
At this point, it should also be briefly mentioned that retention obligations do not only arise under tax and commercial law. Employment law can also result in retention obligations, for example, for employment contracts, personnel files and much more. At this point, however, the main focus will be on the company’s accounting.
Tip: It is not always easy to assign the respective document to the correct category. If in doubt, the document should be kept longer. If you destroy a receipt too early, you may find yourself in need of an explanation when it comes to presenting evidence. In addition, the documents must be kept longer – in deviation from the above-mentioned retention periods – if, for example, an external audit is pending or tax assessments are not yet final.
Retention is part of the accounting obligation
It is important for companies to clean up the archives regularly. After all, archives also incur costs. However, retention periods must be observed. Anyone who violates their retention obligations risks tax and even criminal consequences. Here, therefore, the accounting department needs know-how in order to fulfil all obligations in the organisation of the archives.
As a BPO partner, ICS adminservice also accompanies its customers in their entry into digital accounting, including professional archiving. Digital receipts are archived in a GoBD-compliant and audit-proof manner and can be accessed at any time.
Image source: Pixabay, Photographer: fill
Author
Sylvia Meier
Guest Author
You might also be interested in these posts
October 27, 2021
October 12, 2021
