When you start your business, many of you wonder how to properly manage the accounts. In this guide, you will understand what your obligations are and what your options are for keeping a company's accounts.
A
few reminders on business accounting
What
is accounting for?
When we talk about general accounting, it is a set of
procedures that make it possible to record and classify all the operations and
their values carried out by a company.
From this financial information, accounting documents
are established, in this case a balance sheet and an income statement.
The balance sheet concerns the state of the company's
assets, i.e. what it owns and what it owes at a specific time (at the time of
the closing of the accounting year).
The income statement lists the incoming and outgoing
movements made by the company during the accounting period. We then deduce the
result (positive or negative), called balance, between income and expenses.
It allows you to carry out a real strategic management
of your company thanks to the knowledge and the follow-up of the activity and
the financial health of your company.
Is
keeping business accounts compulsory?
Every company must keep accounts, whether the company is commercial or industrial (source), with a few nuances:
- Small craft or commercial businesses can, under certain conditions (source), benefit from simplified accounting.
- Liberal professionals are subject to simplified accounting with, in particular, the exemption from carrying out a balance sheet.
The accounting of a micro-entrepreneur is summarized
in a book of receipts and expenses (as well as invoicing obligations).
Chart
of accounts and accounting books
The chart of accounts is an essential accounting tool
for all businesses. This is a nomenclature containing two columns (inputs and
outputs) and account numbers classified under 9 accounts (at least). Each
income or expenditure, called accounting entries, is classified in this
document according to the type of operation.
There are also accounting books. There are several types of registers:
- the journal, in which the operations are classified in chronological order,
- the general ledger, where transactions are classified by account number,
- the inventory book which includes the items owned by the company (it is no longer mandatory since 2016).
Business accounting: rules and obligations
The keeping of the accounts must meet certain legal obligations which will mainly depend on the legal form of your company. Overall, a few common rules should be remembered:
- Absolutely all movements must be recorded in accounting entries.
- All supporting documents must be kept and attached to an accounting entry.
- Accounting books must be kept for 10 years.
- Personal accounts should be separated from business accounts.
- The filing of accounts for the companies concerned must be carried out each year.
The different types of business accounting: cash or
commitment
Two types of business accounting exist. One or the
other will be applied depending on your tax system and the options chosen.
Cash accounting means accounting only for receipts and expenses paid, as well as receivables (customer invoice due) and debts (supplier invoice payable) at the end of the financial year.
- This is the simplest, easiest and fastest accounting.
- It concerns in particular entrepreneurs in BNC, and those in BIC with the simplified real regime (optional).
Commitment accounting means recording income and expenses when they are incurred, even if you have not yet paid or been paid.
- This accounting is more complex, it is also more precise.
- It concerns professionals and companies at the IS and in BIC (with some possible exceptions in BIC)
Keeping
business accounts: what are your options?
Excel
is not an option
Even if some continue to use a spreadsheet to do their
accounting, this practice is clearly discouraged since it does not respect several
legal obligations of business accounting.
Indeed, according to article 921-3 of the General
Chart of Accounts, any modification or deletion of accounting data is
prohibited. Each accounting entry must be subject to a validation procedure,
which is not the case with Excel. You can therefore use a balance sheet model,
but it will at least be necessary to complete it with a paper version.
Softwares
Other solutions exist, and you can in particular turn
to accounting softwarecompany. Modern, intuitive, ergonomic, efficient, this
software has many advantages and is increasingly used by entrepreneurs.
If computers put you off, it is also possible to keep
your accounts manually on paper, without erasures. In this case, you respect
the prohibition to modify or delete the accounting data.
Finally, the largest companies choose to entrust the
accounting of the company to an employee or a department of the company, often
with accounting or pre-accounting software?
A
chartered accountant or an online accountant
You can choose to call on a professional outside your
company to keep your accounts. Accounting firms have as their core business the
accounting management of companies. In addition to taking over all or part of
your accounting tasks, they often provide a consulting service, useful for the
management of your business and are even able to assist you with your business
plan.
With a more competitive price/quality ratio, online
accountants offer the same services as physical firms, but remotely and at more
affordable rates. On the other hand, they have some limits on the legal forms
they accept or the types of accounting they can manage, so do not hesitate to
ask for several quotes.
Should
you internalize or outsource your business accounting?
Now that you know all the options, how do you choose
the best one? Each solution has advantages and disadvantages that will tip the
balance depending on your own situation.
If you have a sufficient budget, little knowledge or
resources in accounting and need expert advice, outsourcing your business
accounting to an accounting firm is undoubtedly the best option. You are sure
that your accounting is managed in a qualitative way, without errors. On the
other hand, you will lose responsiveness and control of your costs. You can
choose between total outsourcing (from accounting entry to editing annual
accounts and declarations) or partial (annual accounts only).
Companies with the necessary resources in-house can
entrust the accounting to one or more employees. In both cases, you retain more
control over accounting management and access information more quickly.
Finally, the smallest companies which for reasons of
budget or control want to keep control of their accounting will turn to
software such as Quickbooks or Indy, or MaCompta or Zefyr which go as far as
establishing the balance sheet.