Are you ready for the annual financial statements and the new bookkeeping law?

2024 has ended, and it’s time to ensure that your company’s accounts are entirely in order – especially if your financial year follows the calendar year. Are you on top of the following:

• Are all documents correctly recorded?

• Do bank accounts and the tax account reconcile?

• Are income and expenses adequately accrued?

• Have depreciations been recorded?

At the same time, the transition to the new financial year is an excellent opportunity to ensure that your company complies with the requirements of the new Bookkeeping Act. As of July 1, 2024, it became mandatory for Danish companies to digitize their bookkeeping. If you are still using Excel or physically handling documents, switching to a digital bookkeeping system is crucial to remain compliant with the legislation.

What does this mean for your business?

The new Bookkeeping Act requires all companies to submit an annual report and use a digital bookkeeping system from now on. This is not just a matter of compliance—it’s also an opportunity to streamline administration and free up resources that can be directed toward the company’s core activities.

But what exactly does the legislation entail, which companies are covered, and how can you ensure compliance? Here’s an overview of the requirements and some practical advice on how to get started.

What does the new bookkeeping law cover?

Starting January 1, 2025, all companies whose fiscal year follows the calendar year will be subject to the new bookkeeping law. According to the new law, you must use a digital bookkeeping system to prepare your accounts and store specific documents. The law also aims to make administration more efficient and save time for businesses by automating many of the processes that were previously handled manually.

Under the bookkeeping law, businesses must:

• Record transactions in a digital bookkeeping system.

• Store purchase and sales invoices, as well as other financial documents, digitally.

• Regularly back up accounting material, which must be stored for at least five years.

Using a digital bookkeeping system automates many daily tasks, freeing up resources to focus on your core business.

Who is covered by the law?

If you run a business in Denmark, you must prepare an annual report for The Danish Business Authority. In that case, you must use a digital bookkeeping system, regardless of the company's size. Only if your company or association's net turnover has stayed within DKK 300,000 in the past two years will you not be affected by the upcoming law.

• A standard system that has been approved by The Danish Business Authority and which therefore meets all the requirements of the new law.

• A non-registered system, usually a specially designed system that is tailored to the specific conditions of the individual company. If you decide to use a system that is not approved, please note that it is your responsibility to ensure that the system complies with the law.

You can see The Danish Business Authority's list of approved bookkeeping software systems here.

Preparing for the new fiscal year

If you haven’t implemented a digital bookkeeping system yet, you can explore relevant solutions on kompasbank navigator. Our platform provides access to several digital bookkeeping systems, such as Dinero, e-conomic, Billy, and Zenegy Numbers – all meet the requirements of the new Bookkeeping Act

Examples of systems to help your business:

• Dinero: A user-friendly accounting program ideal for small and medium-sized businesses. Get 50% off a Dinero Pro subscription for the first year via kompasbank navigator.

• e-conomic: Offers a flexible solution with many integration options. Try it free for 14 days.

• Billy: Makes it easy to handle invoices and receipts. navigator users receive 50% off for the first year.

• Zenegy Numbers: Automates bookkeeping and provides a better financial overview.

Annual reporting as a strategic tool

Annual reporting is not just about meeting legal requirements – it's also a crucial tool for making informed decisions and planning for the future. Whether seeking loans, attracting investors, or setting growth targets, a clear and accurate annual report can make a significant difference.

Ensuring proper reconciliation, adhering to accounting standards, and managing tax matters will make your business appear credible and ready to seize the new year's opportunities.

With the help of digital bookkeeping systems and our partners on navigator, your business can comply with the law while setting ambitious goals for the future.

Learn more about your options and digital solutions on kompasbank navigator here.

Source:

https://erhvervsstyrelsen.dk/bekendtgoerelse-om-krav-til-virksomheders-digitale-bogfoeringssystemer-der-ikke-er-registreret