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.
TL;DRDenmark's new Bookkeeping Act, effective from July 1, 2022 and with further requirements phasing in through 2024 and 2025, requires all qualifying businesses to use an approved digital accounting program and store vouchers digitally. Companies that currently manage bookkeeping in Excel are very likely non-compliant and need to act before their deadline.
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:
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.
Under the new bookkeeping act, all businesses are generally required to document their bookkeeping procedures.
The Procedure includes:
The implementation dates for a digital bookkeeping program depend on your company’s accounting class.
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.
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.
Frequently Asked Questions
When do the new digital bookkeeping requirements in Denmark take effect?
The new Bookkeeping Act became effective July 1, 2022, but requirements are being phased in. From July 1, 2024, companies must use an approved digital accounting program, record entries as soon as possible, and store records digitally. For companies with a calendar fiscal year, full compliance is required by January 1, 2025.
Is Excel an acceptable bookkeeping tool under the new Danish Bookkeeping Act?
Almost certainly not. The law requires use of an approved digital accounting program as registered with the Danish Business Authority. Excel does not meet the digitalization requirements, and companies still managing accounts in spreadsheets need to transition to a compliant system before their applicable deadline.
Who is affected by the new Danish Bookkeeping Act?
Most Danish businesses are affected. Any company with annual revenue of DKK 300,000 for two consecutive years must comply, as must associations with business activities. All affected companies must document their bookkeeping procedures, including how transactions are recorded and how accounting materials are stored securely.
Where can I find a list of approved digital accounting systems in Denmark?
The Danish Business Authority publishes a public register of bookkeeping systems that meet all current requirements. Choosing a system from this list guarantees that it has been vetted by the authority. If you use a system not on the register, you bear full responsibility for demonstrating compliance.
What are the practical steps to transition to digital bookkeeping under the new act?
First, select an approved accounting program suited to your company's size and needs. Then plan the implementation with a clear timeline, migrate existing records, train staff on the new system, and document your bookkeeping procedures as required. Build in time for testing before the compliance deadline.