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Your Accounting Must Be Digital: The New Bookkeeping Act

The bookkeeping act needed modernization to stay current, which led to the implementation of a new bookkeeping act on July 1, 2022. According to the new bookkeeping act, your accounting must be digital, which places specific requirements on the accounting software you use. If you manage your bookkeeping in Excel, it is very likely that you will not meet the new law’s digitalization requirements.

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Learn about the New Bookkeeping Requirements in 2024

The new law is being phased in over several years, meaning that in 2024, there will be further changes to how you must maintain your accounting records.

The Requirements are:

  • You must use an approved digital accounting program.
  • You must record all entries as soon as possible.
  • You must store your records in your digital bookkeeping system.

 

These rules take effect on July 1, 2024. Your business must implement these requirements by the next financial year. If your fiscal year follows the calendar year, the requirements must be in place by January 1, 2025.

Find Approved Bookkeeping Systems at the Danish Business Authority

The Danish Business Authority has provided a list of registered bookkeeping systems that meet all current bookkeeping requirements. By choosing one of these systems, you ensure compliance with all regulations. If you use a system not registered with the Danish Business Authority, it is your responsibility to ensure that your bookkeeping system complies with the bookkeeping act’s regulations.

Who Is Affected by the New Bookkeeping Act?

Under the new bookkeeping act, all businesses are generally required to document their bookkeeping procedures.

The Procedure includes:

  • Documentation of how you record transactions.
  • Documentation of how you securely store your accounting materials.
  • Documentation of the company’s responsibility for these two points.

 

The implementation dates for a digital bookkeeping program depend on your company’s accounting class.

Important Dates to Note:

  • July 1, 2024: This is the earliest date the bookkeeping rules can take effect for companies in accounting classes B, C, and D.
  • 2026: During 2026, it is expected that companies in accounting class A will also need to meet the digital bookkeeping requirements. However, this only applies to sole proprietorships with a turnover exceeding 300,000 DKK for two consecutive years.

What the New Bookkeeping Act Means for Danish Businesses

The updated bookkeeping act simplifies business operations in Denmark. The new digitalization requirements also bring automation and administrative time savings.

In other words, it becomes easier and more efficient to record transactions and report VAT and annual accounts to the Danish Tax Agency.

This can lead to significant financial benefits for all businesses in Denmark.

Additionally, it is safer to keep records this way if your company faces cyberattacks or other IT crimes, as all accounting materials will be stored more securely than before.

What Happens if You Do Not Comply with the Law?

As a business, it is crucial to understand the bookkeeping act and, most importantly, comply with its digital bookkeeping requirements. Failure to do so means your business is violating the bookkeeping act.

Non-compliance can result in fines and penalties for your business. In the worst case, it can lead to a police report.

The Danish Business Authority oversees annual reports and ensures that Danish (and foreign businesses operating in Denmark) comply with the bookkeeping act’s requirements.

It is the person responsible for the violation of the bookkeeping act’s rules who is punished. Typically, the organization’s leadership is responsible for ensuring that the company has implemented the correct accounting software for digital recording and bookkeeping.

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