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Bookkeeping: what is and what books are required

The bookkeeping is an obligatory activity in Spain and can be a very useful tool to obtain the real image of the activity carried out by any company and to be able to realize an adequate and controlled planning of it. If you do a business activity you will be interested to know them.

What is the Bookkeeping?

Bookkeeping, which is usually known as Accounting, is the introduction of all transactions of any kind made by an entrepreneur (whether natural or legal person) in an accounting program that complies with the requirements established by commercial regulations. Its objective is to record the transactions carried out by the company and reflect them as established by the accounting standards in force in Spain, since the Spanish General Accounting Plan requires the correct accounting of the operations of a company.
Accounting is not something that has recently invented. They have found mud tablets of Sumerian origin of about 6.000 BC and Egyptian hieroglyphics in which an accounting activity can already be seen.

The importance of record correctly

The Bookkeeping must be very precise so the accounting and fiscal results obtained in the development of an activity are correct. In addition, correctly register operations is very important to have a true image of the company.

Due to this importance, Bookkeeping is usually carried out by a bookkeeper or an accountant. It is the person who is responsible for taxing financial transactions of the business in the accounting books daily. For each transaction there must be a document describing it, for example with an invoice, a receipt, a payment from the provider, bank payments, etc. Based on this information, the result of the activity and the patrimonial situation of the company are determined and this allows carrying out the planning and future strategy of the company.

What are the mandatory accounting books?

As we explained in our article on the legalization of the accounting books and as indicated in article 25 of the Spanish Commercial Code, the compulsory books are:

  • Book of Inventories and Annual Accounts. It consists of:

o Balance of Initial Situation
o Trial Balance
o Closing Inventory for the year
o Annual Accounts with:

 Balance sheet
 Income statement
 Statement of changes in equity
 Cash flow statement
 Annual report

  • Journal ledger. Operations are recorded chronologically.

How to correctly carry out the Bookkeeping?

As it is a technical procedure that requires time, knowledge and precision, it is necessary to have a specialist who takes care of it and who knows perfectly the requirements required by accounting regulations in Spain. At GM Tax we adapt to the needs and requirements of each company. You just need to explain your situation and we will offer you a specific plan for your business. We have a lot of experience in Bookkeeping service, especially in what refers to the services and business sector via Internet.

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