Several decades ago, we saw the first wave of digitization hit the business world. Initially, to power analog media so they could be digitized. Today we’re in the fourth wave of digitization, where artificial intelligence and robotics are being implemented to support the way, we make decisions.
There’re still many organizations who haven’t embraced digitization and digitized the physical and analog medias. That’s going to change now. A proposal has been made to amend the Danish Bookkeeping Act. The proposal is expected to apply from 1st July 2022. An amendment to the Act will have great significance for those companies that currently don’t store their accounting material digitally.
Digital storage requirements
The proposed legislation indeed stipulates that accounting materials and invoice management must be stored digitally going forward. In addition, a digital backup must be maintained, and most significantly, it will no longer be legal to store accounting materials in physical form. The new storage requirements are intended to apply to companies with an annual net turnover of over 300,000 DKK, for fiscal years starting January 1, 2023, or later. There is no requirement for the digitalization of accounting materials from previous fiscal years, but it is suggested that companies unable to meet the new requirements of the accounting law may be penalized with fines up to 1,500,000 DKK.
Quick registration
In addition, the proposal also contains a requirement that all accounting material must be registered no later than 10 working days after receiving it. Depending on what exactly lies in “registered”, many companies will have to take a look at their internal processes for registering and bookkeeping expenses:
– It doesn’t look good for the companies that, upon receipt of an invoice or account statement from their card issuer, send the relevant postings to the individual employee or cardholder, who then attaches his or hers receipts and sends it all back for approval again, says Puk Askøe Bak, implementation consultant at Acubiz.
– Now, of course, we must wait and see what lies within the “10 days registration”. However, as I interpret it, all information to be used for posting must be registered, but not necessarily booked, within 10 days. So, no matter what the final legislation will be it doesn’t change the fact, that companies that manually distribute and handle expenses, invoices and other accounting material, are likely to find problems staying within the 10-day span, Puk continues.
The proposal to amend the Danish Bookkeeping Act, which has been submitted by the Danish Business Authority, is due for consultation in the Danish Parliament in February. Of course, we are going to follow up on any updates regarding the proposal.
