Samostojno vodenje racunovodstva

The Companies Act stipulates that companies and entrepreneurs must keep business records and close them annually in accordance with this law and the Slovenian Accounting Standards or international financial reporting standards if the law does not specify otherwise. In Slovenia, there is no regulation mandating that a business entity must have accounting, so the answer to the question “Can I do my own accounting?” is YES.

Basic Accounting Principles

An entrepreneur can decide whether to keep business records using the single-entry or double-entry bookkeeping system (for lump-sum taxpayers, maintaining records of accounting documents is allowed, in connection with the register of fixed assets and appropriate inventory records). However, for companies, double-entry bookkeeping is mandatory. Regardless of the accounting system used, records must be maintained in a way that allows the reliable preparation of annual income tax returns or corporate income tax returns, as well as an annual report containing at least a balance sheet and income statement.
For an entrepreneur to manage accounting on their own nowadays, the use of suitable accounting software is essential. Such software facilitates repetitive accounting rules and calculations, but a clear understanding of basic accounting principles is necessary: the principle of double-entry bookkeeping, adherence to the principle of occurrence of a business event, the principle of closing the business year and carrying over to the next business year, the principle of the unlimited operation of the company, etc. Lack of knowledge of these basics can lead to incorrect use of accounting software. Using accounting software can be compared to using a program for writing code or a text editor. Knowing the functionality of these programs does not necessarily mean one can program or write exceptional novels .

It is also crucial to understand the fundamental principles of accounting, such as the principle of the occurrence of a business event, the principle of consistency and stability, and others. Adhering to these principles is essential for the proper recognition and matching of revenues and expenses. Only in this way will our accounting information be accurate and suitable for the preparation of further reports.

Is it sensible, then, to do my own accounting?

Many see accounting as an additional obligation and an unnecessary extra cost. However, a good accountant can be the key to business success. This is the reason why many prefer to entrust accounting tasks to qualified professionals. An accountant, with their expertise, honesty, and responsibility, ensures that accounting information is accurate, reliable, and timely.
Even if you issue and receive only a few invoices each year and believe that you don’t need an accounting professional, doing so allows your business to operate appropriately and in compliance with the law. Often, entrepreneurs are unaware of all the requirements and tasks. With ongoing inspections by the financial administration, labor inspectorate, and other supervisory authorities, numerous fines are issued every year, typically starting from EUR 5,000 for companies and EUR 500 for responsible persons.

Below are some specificities that a business entity may encounter in its operations:

  • obligation for timely VAT registration,
  • submission of a recapitulative report,
  • specification of a special clause on issued invoices,
  • inclusion in the special EU scheme One-Stop Shop,
  • meeting the condition for exiting the so-called lump-sum taxation,
  • tax certification of cash registers,
  • submission of a report on remote sales of goods to other EU countries,
  • submission of data for the assessment of capital gains tax on the disposal of securities and other shares, as well as investment coupons,
  • submission of financial account statistics,
  • reporting to the Bank of Slovenia, and
  • other obligations.

All these tasks have precisely defined regulations and deadlines that must be strictly adhered to. An accountant will alert you to such matters, handle necessary registrations, and submit the required reports on your behalf. Consequently, you won’t need to read legislation and waste time studying it. If your accountant takes care of submitting all the relevant reports and statements, you can avoid potential fines, interest, and consequently, poor business performance. A good accountant is also an expert in tax and other areas, helping you optimize your business operations in compliance with the law. They will point out potential mistakes and advise on how to conduct business in the future.
Before registering a company, it is advisable to consult with an accountant. They will help you choose the most appropriate legal organizational form, the method of keeping business records (single-entry or double-entry bookkeeping), determine the method of calculating the tax base, and answer other important questions.

What tasks do I need to perform if I manage my own accounting?

As mentioned earlier, you can handle accounting tasks yourself. Properly maintaining accounting records is necessary for business operations. These records serve as the basis for appropriately recording business events. Data from accounting records are then transferred to accounting books. These books constitute a collection of accounting data with recorded business events that document assets, liabilities to sources of funds, revenues and expenses, forming the basis for accounting and financial reports. Accounting books must be kept using a double-entry bookkeeping system unless the law specifies otherwise. For this purpose, you must maintain a general ledger and subsidiary ledgers.
Even so-called lump-sum sole proprietors, who initially seem quite simple to manage in terms of accounting, must maintain records of accounting documents, archive issued invoices in accordance with the law, and submit contribution statements. They must ensure that invoices are issued in accordance with the law. Nevertheless, they can quickly become liable for VAT, need to certify invoices for tax purposes, exceed the threshold for exiting the lump-sum taxation, or are obliged to submit certain reports, leading to several accounting peculiarities.

To manage accounting, you need software that allows you to maintain appropriate accounting documents and records. The cost of such software for an individual is often higher than what you would pay for an accounting service that usually has the software leased. While it is possible to manage everything manually, it consumes additional time and increases the likelihood of errors.

In business operations, you will encounter various taxes, most commonly corporate income tax, personal income tax, and value-added tax. Besides submitting returns for the aforementioned taxes, the company may also be obliged to submit other tax returns. Specific regulations apply to the submission of each return.

On a monthly basis, companies most frequently have to submit payroll returns, value-added tax returns, returns for other personal income, and social security contribution returns (sole proprietors). In addition to regular monthly returns, other returns and reports need to be submitted, depending on the size of the company and the type of business. Many are also obliged to submit various statistical data to SURS, the Bank of Slovenia, or AJPES. All returns and reports must be submitted within prescribed deadlines, in the prescribed format and on the correct form, and the data submitted must be accurate and reliable. Failure to comply may result in penalties. As an example, a legal entity is fined from EUR 1,200 to 15,000 (for a medium or large company, the fine ranges from EUR 3,200 to 30,000), and an accountable person is fined from EUR 400 to 4,000 for failing to calculate VAT on time.

Pitfalls and Specifics of Managing Your Own Accounting

It often happens that after submitting a specific report, you receive a notice from the Financial Administration of the Republic of Slovenia. They may require various explanations and evidence for the submitted returns. Preparing these requires additional knowledge and time. If a professional accountant handles this for you, they ensure that the data is accurate and appropriate, provide necessary explanations and evidence.
Legislation and regulations from the legislator are constantly changing, so constant monitoring and familiarization with them are necessary. It is crucial to stay informed and adapt to changes. A good accountant will alert you to changes in a timely manner and consistently consider them in their work. An accountant must continuously educate themselves and follow changes in tax and procedural regulations and standards, which is not an easy task.

Therefore, you can manage your accounting yourself. This will require continuous education, monitoring changes in legislation, and studying labor and tax laws. If you wanted to know all the rules and all the legislation, you would have to read at least the following before starting your business: the Companies Act, Slovenian Accounting Standards, Value Added Tax Act, Labor Relations Act, collective agreement binding you, Tax Procedure Act, Corporate Income Tax Act, Income Tax Act, and all regulations and decrees related to these laws. The time spent on this could be better used to find new business opportunities, attract new customers, increase your income, and maintain competitiveness in the market.

Solo entrepreneurs and small companies often prefer to entrust accounting services to an external provider rather than employ a professional. When doing so, it is essential to be cautious about the choice of the service provider. Many providers are not adequately qualified. Anybody can offer accounting services without the appropriate education and knowledge.

A good accountant, with their knowledge and experience, does more than just bookkeeping. Before choosing an accounting service, it is essential to check at least the following important aspects:

  1. Whether they are registered in:
  • The Chamber of Accounting Services Members Register;
  • The Catalog of Certified Accounting Service Providers in Slovenia;
  • The list of accounting service providers operating in accordance with the Service Providers Standard.
  1. What services they offer (in addition to basic services, additional services such as reporting to management and owners, consulting, etc.)
  1. Whether they have professional liability insurance – a service provider with such insurance demonstrates a certain level of responsibility in their business.
  1. Whether they already have a client from the same industry as your business.
  1. Whether you get your account manager as a client? Having an account manager is advantageous as they know your business and operations, warning you about unsettled matters.
  1. Whether accounting is their primary activity, and if they dedicate all their time to it? Check how often they send reports and information regarding your business operations.
  1. Whether they operate in line with business ethics and the Chamber of Accounting Services Members’ Code of Conduct?
  1. Whether the accounting service provider is a member of any professional organizations? This means that the accounting service provider has access to various education programs, the exchange of best practices, notifications of legislative changes, and is also obliged to adhere to the professional code of conduct.
  1. How they ensure the security of business and personal data and how they protect the document system.

The accounting service Promotiv, d.o.o. respects and adheres to all the above rules and manages clients’ accounting in accordance with regulations, providing advice on tax and other matters. For additional information and an offer, you can email us at info@promotiv.si.
Eva Jančigaj
Accountant and Tax Specialist

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