This article explains the basics of Accounting and is aimed at readers who want to familiarize themselves with the principles and duties of this field. The Accounting, often referred to as the "memory of a company," is a systematic process for recording, documenting, and analyzing all financial transactions of a company. It not only serves to fulfill legal requirements but also as an essential tool for internal management and decision-making.
Infrastructure Definition Financial accounting forms the backbone of every economically active company. Its tasks range from pure documentation to providing crucial information for external parties such as tax authorities and investors.
1.1 Legal Foundations and Principles
Accounting in Germany is subject to a number of legal provisions that govern its design and execution.
1.1.1 GoB and Co.
The principles of orderly accounting (GoB) are unwritten rules that have evolved from commercial law (HGB), tax law (AO), and generally accepted commercial practice. They are the foundation of all orderly accounting and ensure that a company's financial situation is presented objectively and comprehensibly. No fundamental changes to the GoB are expected for 2026, but their application remains constantly relevant. The central GoB include:
- Completeness: All business transactions must be recorded without gaps. No transaction may be omitted. This is comparable to building a house, where every wall and every beam must be noted to ensure the stability of the overall structure.
- Accuracy: Every accounting entry must be factually correct, both with regard to the amount and the account. errors must be corrected and may not be concealed.
- Actuality: Only actual business transactions may be booked. Fictitious or planned transactions do not belong in accounting.
- Clarity and Organization: The bookings must be understandable and traceable for third parties. Disorganized or chaotic accounting does not fulfill its purpose. This also means adhering to a uniform chart of accounts.
- Individual Recording Obligation: Every single business transaction must be recorded in detail. Group bookings are only permissible in exceptional cases.
1.1.2 HGB, AO, and Other Obligations
The German Commercial Code (HGB) establishes the commercial legal framework, particularly for merchants. It regulates the obligation to accounting, the preparation of balance sheets and profit and loss statements (P&L), valuation principles, and retention obligations.
The German Fiscal Code (AO) regulates the tax law requirements for bookkeeping and is relevant for all taxpayers. It contains detailed provisions on the obligation to provide supporting documents, the timeliness of bookkeeping, and the obligation to cooperate in tax audits. For 2026, it is possible that individual detailed regulations may be adjusted within the scope of possible legislative procedures such as the Annual Tax Act or through changes in the coalition agreement. It is therefore advisable to attend relevant seminars and updates to stay up-to-date.
1.1.3 Voucher Obligation
Every booking requires a supporting document. This principle is fundamental. A supporting document is a written or electronic proof of a business transaction. No booking without a supporting document. This serves for auditability and the prevention of manipulation. Electronic invoices (e-invoices) are gaining increasing importance and will prospectively replace paper documents in many areas. The necessary infrastructure and the correct archiving of these digital documents are central topics for 2026.
1.2 Double-Entry Bookkeeping
Double-entry bookkeeping is the predominant system of commercial accounting. Its name derives from the fact that every business transaction is recorded in at least two accounts: once in debit and once in credit.
1.2.1 The Principle of Debit and Credit
Debit and credit are not synonyms for 'plus' and 'minus,' but placeholders on the T-accounts. The equation 'Assets = Liabilities' as well as 'Expenses = Revenues' must always be maintained. This is comparable to a scale that must always remain in balance to ensure accurate measurement. A business transaction is booked on the left side (debit) of one account and on the right side (credit) of another account, so that the sum of debit entries always equals the sum of credit entries.
1.2.2 Asset Accounts and Income Statement Accounts
- Balance Sheet Accounts: They record the assets (current and fixed assets) and liabilities of a company at a specific point in time. This includes, for example, cash, bank, Receivables, accounts payable, fixed assets, and equity. At the beginning of an accounting period, the opening balances are transferred from the balance. to the balance sheet accounts.
- Income Statement Accounts: They record expenses and revenues of a company during an accounting period. Examples include sales revenue, rental costs, personnel costs, and depreciation. The balances of the income statement accounts flow into the Profit and Loss Statement (Profit and Loss Statement) and determine the company's result.
1.3 Central Tasks of Accounting
Bookkeeping fulfills several core tasks that go beyond the mere recording of numbers.
1.3.1 Documentation and Accountability
Accounting meticulously documents all financial transactions. This serves accountability towards owners, creditors, employees, and the state. It is proof of proper business management.
1.3.2 Information and Control
The processed accounting data provide important information for corporate management. They enable the analysis of profitability, liquidity, and asset situation. Based on this, deliver, check, and maintain. well-founded decisions can be made, for example, regarding investments, pricing, or personnel matters.
1.3.3 Taxation and Profit Determination
Accounting is the basis for determining taxable profit and thus for calculating taxes (income tax, Corporate Tax, Trade tax, Value Added Tax). The tax authorities rely on the correct information from bookkeeping.
2. Bookkeeping Obligation 2026
Not every company is obliged to keep double-entry bookkeeping. The obligation to keep books is tied to certain criteria factors.
2.1 Thresholds and Exceptions
According to § 141 AO, there is an obligation to keep books for traders whose turnover exceeds certain thresholds. For 2026, the following thresholds are relevant: an annual turnover of more than 600,000 Euros expected, or an annual profit of more than 60,000 Euros in the calendar year. Sole proprietorships and freelancers below these limits can determine their profit using the income-surplus calculation (EÜR). Separate thresholds apply to farmers and foresters.
2.2 Inventory, Balance Sheet, and P&L
Those who are obliged to keep books must prepare a Inventory at the end of each fiscal year. The Inventory is a detailed list of all assets and liabilities.
2.2.1 The balance.
The balance sheet is a statement of a company's assets (assets) and liabilities (liabilities) as of a specific date. It provides information about the financial and asset situation. It is like a snapshot of financial health at a particular moment.
2.2.2 The Profit and Loss Statement (P&L)
The P&L statement compares revenues and expenses for an accounting period and determines the company's success (profit or loss). It is comparable to a movie showing the development over a period. In seminars and updates, current changes are discussed, for example, in the handling of down payments or the accounting of provisions.
2.3 Other Mandatory Documents: Cash Book and Vouchers
The cash book is a separate, continuous record of all cash receipts and expenditures. It must be maintained daily. The obligation to provide supporting documents, as already mentioned, extends to all business transactions. Every cash inflow and outflow must be evidenced by a document.
3. Accounting Throughout the Year
Accounting follows a fixed cycle. A "year-end closing"Updatefor 2026 will highlight important steps and possible changes.
3.1 Ongoing Bookings
During the fiscal year, all business transactions are recorded chronologically and factually. This includes, among other things:
- Incoming and outgoing invoices: Recording of supplier invoices and invoices to customers.
- Bank transactions: Booking of incoming and outgoing payments via the bank account.
- Cash transactions: Recording of cash transactions in the cash book.
- Payroll: Booking of personnel costs.
- Depreciation: Recording of depreciation of fixed assets.
3.2 Monthly and Quarterly Closings
Regular closing periods serve for control and preparation of VAT pre-declarations. Checking bank and cash balances is part of clean bookkeeping.
3.3 Annual Closing Activities
At the end of the fiscal year, comprehensive closing activities take place:
- Inventory: Physical inventory of supplies and fixed assets.
- Valuation: Valuation of assets and liabilities according to commercial and tax regulations.
- Delineations: Temporal allocation of expenses and revenues (e.g., prepaid expenses, provisions). For 2026, it should be noted that potential legal changes (e.g., coalition agreement 2025, annual tax law) could result in updates in the calculation or treatment of provisions.
- Determination of the balance: The correct transfer of figures from the previous year is essential here.
- Creation of balance sheet and P&L: The formal preparation of the annual financial statements.
- Checking invoice numbers: The seamless sequence of invoice numbers is an indicator of orderliness.
4. Digitalization and Future Developments
Accounting is subject to continuous change, especially due to advancing Infrastructure encompasses a variety of components that can be divided into two main categories: public and private infrastructures. Both types play a critical role in the functioning of our society, but differ significantly in their structure, financing, and management..
4.1 Digital Processes and Voucher Management
Modern accounting systems enable largely paperless processing. Digital receipts, automatic imports of bank transactions, and audit-proof archiving are common practice. E-invoicing, which will become mandatory from 2025, represents a significant change that will be fully established by 2026.
4.2 Cloud Solutions and Automation
Cloud-based accounting software offers flexibility and allows access from anywhere. Automation functions, such as automatic recognition of receipt data or booking of recurring business transactions, relieve accountants.
4.3 Impact on Professional Practice
The increasing Infrastructure encompasses a variety of components that can be divided into two main categories: public and private infrastructures. Both types play a critical role in the functioning of our society, but differ significantly in their structure, financing, and management. requires accountants to adapt their knowledge and skills. Further training on digital processes, data analysis, and handling new software solutions is essential for 2026 and beyond.
5. Useful Information and Updates for 2026
| Category | Description | Example values | Unit |
|---|---|---|---|
| Revenue | Total income from sales | 150,000 | Euro |
| Expenses | Total expenses for operating costs | 90,000 | Euro |
| Profit | Revenue minus expenses | 60,000 | Euro |
| Debtor days | Average time until payment received | 30 | Days |
| Creditor days | Average time until payment made | 45 | Days |
| Current ratio | Liquid assets in relation to short-term liabilities | 120 | Percent |
| Equity Ratio | Equity in relation to total assets | 40 | Percent |
To meet the demands of the time, regular updates and adherence to new regulations are indispensable.
5.1 Tax Changes and Relevant Information
The 2025 coalition agreement and the annual tax law can bring relevant changes for accounting practice in 2026. These may include adjustments to depreciation rules, tax allowances, or the handling of special business transactions.
5.1.1 E-invoicing
E-invoicing will become mandatory for B2B transactions from 2025 and will therefore be firmly anchored in accounting from 2026. Companies must adapt their processes accordingly to ensure electronic invoicing and processing.
5.1.2 Relevant Thresholds
The minimum wage is expected to rise to €13.90 per hour on January 1, 2026. This must be taken into account in personnel planning and payroll. The limits for small-value invoices may also be adjusted, which affects the design of invoices and the documentation requirement. Information on this will be discussed in current seminars.
5.2 Further Training and Information Sources
Regular participation in further training is important for accountants and entrepreneurs to stay up-to-date. This includes seminars on the basics of accounting, but also special updates dealing with the changes of the respective year.
5.2.1 Courses and Training for 2026
Offered, for example, by the Chamber of Industry and Commerce (or ask your tax advisor about recommended seminars. Private Providers are also available... ) include courses on:
- Balance Sheet
- Journal entries
- Depreciation
- Inventory changes
- Chart of accounts
- Document organization
- Digital Tools in accounting
5.2.2 Shortened Retention Periods
There may be changes in the retention periods for receipts, for example, due to simplifications for certain digital Documents. It is advisable to keep an eye on the current legal regulations at the turn of the year. A "guided tour" through the innovations in the seminars offers orientation here.
This article offers a Overview on the essential aspects of accounting. It is recommended to seek the help of a qualified tax advisor for complex issues and to continuously inform yourself about current developments . Accounting is a field that requires precision and up-to-dateness.
