Overview rules and regulations
It is a common misconception that you must do the accounting in chronological order. This view comes from the time before accounting began to be managed with the help of computers, as before that there were not the same possibilities to sort lists and transactions in any way you wished.
The Accounting Act 5, chapter 1 section says
“The business events must be recorded so that they can be presented in order of registration (basic accounting) and in systematic order (main accounting). This must be done in such a way that it is possible to check the completeness of the accounting entries and to have an overview of the operation's progress, status and results.”
In computer-based accounting, basic accounting can be presented in the form of a verification list, and the general ledger is automatically sorted in date order regardless of whether the accounting has been done in chronological order or not.
The Accounting Act 5, chapter 2 section says:
“Cash deposits and withdrawals must be booked no later than the following working day. Other business events must be recorded as soon as possible.”
Cash sales must therefore be recorded on a daily basis. How often other types of business events must be recorded depends on how large the company is and how many business events the company has. Generally speaking, the accounting must be done within 50 days of the end of the month in which a business event took place. For companies with a turnover of less than three million SEK, the accounting must be done no later than 50 days after the end of the quarter in which a business event took place. Companies with a turnover of no more than one million SEK and if there are normally no more than 50 transactions to bookkeep per financial year may manage their accounting annually, but it must be completed no later than 60 days after the end of the financial year in which the business event occurred. For sole trader companies that meet these requirements and that do not have cross-border transactions within the EU, it is sufficient if the bookkeeping is complete by the day the income tax return must be submitted.
The Accounting Act 5, chapter 7 section says:
“The verification must include information about when it has been compiled, when the business event has occurred, what it refers to, what amount it applies to and which counterparty it concerns. Where applicable, the verification must also include information about documents or other information that formed the basis of the business event and where these are available.”
In practice, as a small business owner, you mostly need to think about this when you create a verification, which is almost exclusively when you create a receipt or invoice for a sale you make. If you use an invoicing program, this pretty much takes care of itself as long as you fill in all the company information when you start using the program. When it comes to expenses, according to our experience, there are a number of documents that are often mistaken for complete verifications even though they are not:
- Reminders/collection claims. These are the basis for possible reminder fees and late payment interest, but in most cases not for the cost and VAT specified on the original invoice that is being reminded about. For accounting purposes, the original invoice must also be registered, and if you are missing it, you need to contact the supplier for a copy of the invoice.
- Order confirmations and delivery confirmations. Although these sometimes contain all the information about VAT and what product or service was supplied, they are not the final documents that the purchase has been completed. Orders can be canceled, and purchases can be split into different deliveries. So, the actual verification is the complete receipt that payment has been made, or invoice that summarizes and contains all the information about the purchase made.
- Card slips from payment card terminals. These "receipts" are only proof that a payment has been made, but not for what was purchased. It often says "No receipt" on these. The receipt for the purchase is what is needed, which also contains all the information about VAT and which items were paid for.
- Payment receipt from the bank or e.g., PayPal or Klarna. These are not enough, there must be a receipt or invoice that clearly shows what was purchased and from whom. If you pay via Klarna or PayPal, you still must make sure that you get a receipt from the supplier that shows all the information about the purchase.
- Documents with an invoice recipient other than your company. Neither your own name (Unless you have a sole proprietorship) nor any other company name as the invoice recipient may appear on an invoice, even if it concerns expenses to be reimbursed. It is your company that must be responsible for paying for what was purchased, and it is not enough to call the purchase an expense reimbursement if someone else's name is on the document.
Nowadays, the law requires that you save your accounting material for seven years. If you have a copy of a voucher, it is sufficient to save the original for three years after the end of the calendar year in which the financial year ended. So, if you have a financial year that ends on 10/31/2022 and you scan your paper invoices, you need to save them at least until 01/01/2026.
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