Everything about financial administration for SMEs
Keeping records is a legal requirement for both individuals and entrepreneurs. These records consist of all income and expenses and form the basis and substantiation for your tax return. The Tax and Customs Administration has legally established which data must be kept and for how long. The rules for SMEs differ from those for individuals.
A clear overview of all documents belonging to the financial administration can be found below. For extensive advice or assistance with financial administration for SMEs, you can also contact us. We are happy to assist you with personal advice based on our extensive knowledge in this field.
Financial administration for SMEs
As an entrepreneur, you must always be able to demonstrate your annual income and costs. This is because income or corporate tax is based on this information. Financial administration for SMEs is essentially nothing more or less than a complete overview of your company’s income and expenses. This data must be stored digitally or in paper form and must be available for presentation during an audit by the Tax and Customs Administration.
An overview of all basic data
All data about your organization that you receive or record (on paper or digitally) belongs to your administration. The Tax and Customs Administration considers the following to be basic data:
- the general ledger
- inventory records
- accounts receivable
- accounts payable
- purchase records
- sales records
- payroll records
It is widely known that these records are part of the administration because they are of fiscal importance. However, there is more data subject to the retention obligation, such as your emails and calendar. To help you get started with your financial administration, we share a handy overview of all documents you must keep below.
Documents for SME financial administration
Where applicable, the following documents must be kept for the financial administration:
- Cash records and receipts
- Invoices, both received and sent
- Financial notes, including purchase and sales ledgers
- Interim audit calculations
- Bank statements
- Contracts and agreements with customers, partners, or employees
- Correspondence
- Calendars
- Payroll records
- Time tracking
- Mileage records
- Software and data files
- Insurance policies
Tax retention obligation
There is a tax retention period for financial administration. In principle, this is 7 years. The retention period only starts when the data is no longer current. For a contract with a term of 5 years, for example, the retention period only begins once the 5 years have expired. Sometimes the period is longer than 7 years. For VAT (Value Added Tax), for instance, a retention period of 9 years applies to real estate. The retention period for the Mini One Stop Shop (MOSS) scheme is 10 years. This starts after the end of the year in which the services were provided.
For more information on automated administration and the tax retention obligation, download the brochure from the Tax and Customs Administration
Maintaining accounting records
Since 2019, paper and digital invoices have been treated as equal, so it is not necessary to keep all records on paper. An online accounting program is very interesting because many documents are automatically saved and often structured immediately. Everything is stored in the cloud and can be safely kept there for a long time. An online accounting package makes administration and filing tax returns much easier. This saves you a lot of time and often costs as well. The software available to you as our client also includes an app that allows you to submit receipts, view your administration, and update it anytime, anywhere.
Tips for good financial administration
Finally, a few tips for good financial administration: Good preparation is half the battle. If you are a starting entrepreneur, make sure you know what is expected. Open a business bank account so that business and personal income and expenses remain separate. Keep up with the administration. By regularly updating your records, you maintain an overview. Save receipts/invoices (or a digital copy) immediately or keep them in a separate folder. Consider using an online accounting package. This will save you time and money.
Need help?
For help with setting up your financial administration, maintaining it, or filing your tax returns, you can call on an accounting firm. At MKB Boekhouders, we have extensive experience in guiding SMEs in setting up and maintaining their financial administration. We are also happy to be of service to you with personal advice and professional guidance. Contact us for a non-binding introductory meeting.