Data bank

What is accounting - in short

Accounting is an information system that maintains information about the financial activities and condition of a company or entity with the accuracy of an individual transaction. Accounting also means recording transactions and other related activities. An important part of accounting is the general ledger, ie the register, which monitors trade payables and trade receivables and their payments. Accounting transactions are recorded using documents. The document can be an invoice, contract or other activity that verifies the basis and nature of the transaction posting. It is advisable to process the documents electronically. This way, the information in them can be easily searched, saving time, effort and archive space. Statutory and other reports are produced from the accounts for the needs of the company or entity itself and its stakeholders. One of the important functions of accounting is to keep private and corporate assets separate. With regard to the supporting documents to be attached to the company's accounts, attention must also be paid to formalities and other legal requirements. The general goal is to get a correct and sufficiently accurate picture of the profitability of the company's operations.

 

The basic accounting system has been developed long ago. The general principle is to distinguish between a company's assets (debit) and liabilities (credit). The result for the financial year is monitored in the income statement, while the balance sheet includes items that are longer-term. One key indicator in the balance sheet is the company's equity, which includes owners' equity investments, other fund investments and, according to certain rules, also capital loans. From the company's point of view, these items are credit, ie they have been given by the owners to start the company's operations. Other liabilities of the company consist of, for example, loans from banks and other financiers or, for example, trade payables from suppliers. A company's assets (debits), on the other hand, consist of various tangible or intangible items, such as fixed assets (eg production machinery and equipment) or inventories (inventories, etc.). According to the company's result during the financial year, the company pays income tax. If the company's business is taxable under the VAT Act, the company also includes VAT when invoicing. Similarly, a company may deduct VAT on purchases made for that activity. Net tax is either paid or claimed as a refund from the taxpayer through the deductible service. We will help you get started right here from the start.

The law requires a company to keep records of its operations and to file them for the periods required by law. The documents must be kept for the current year + 6 years back. Balance sheets 10 years back.

 

What should I do if the document is lost? Chapter 2, Section 5 of the Accounting Act states that when a document issued by a third party is not obtained as the basis for the entry, the entry is verified by means of a duly prepared and duly certified document prepared by the accounting officer.

 

How to invoice self-paid expenses from the company? By issuing an invoice (travel or expense invoice) to the company to debit the company with expenses. As the invoicer, the payer - please attach the original purchase receipt. We always recommend using electronic financial management software to process receipts and receipts. It saves you time, effort and money!

The financial statements are a summary statement of the company's financial year, which examines the company's financial results and position at the time. The aim is to allocate expenses corresponding to income to the income statement so that the company's result for the financial year is as accurate as possible. The company must prepare financial statements at least once a year. In addition, the company may, if it so wishes, make interim financial statements more frequently (eg on a quarterly or other basis) in order to ascertain the company's current situation.

Electronic identification

The suomi.fi authorization is used for electronic authorization.

In Suomi.fi authorizations, you can authorize another person or company to do business on your behalf. You can also request authorization to do business on behalf of another person or company and manage authorizations centrally.

The use of Suomi.fi authorizations is secure because the user is identified by strong authentication. For more information about authentication, see the Authentication Information page.

During 2019, suomi.fi identification will replace the previously used see identifier.

Cash forecast

An up-to-date cash forecast is used to ensure that the company's incoming cash flows cover all the company's expenses and other expenses. In this way, an acute shortage of money for the company can be anticipated and avoided. In the long run, the company's cash position follows the company's profitability, but, for example, large investments and strong growth easily separate them. Even a profitable company can quickly run into cash register problems and, at worst, go out of business. Monitoring the company's cash flow is one of the most important areas in business monitoring. The old adage “profits come and go but cash is the king” holds true for the success of a company.

Audit

An audit is an audit of the accounts and operations performed by an external auditor. The inspector must have the required Authorized Public Accountant or HMT qualifications completed. The Community and the Foundation shall elect an auditor and provide an audit if at least two of the following conditions are met during both the financial year and the financial year immediately preceding it:

1) the balance sheet total exceeds 100,000 euros
2) turnover or equivalent income exceeds EUR 200,000
3) an average of more than three people are employed.

However, an entity should always carry out an audit if the entity's principal activity is the ownership and management of securities and it has significant influence over the business or financing of another accounting entity. Where appropriate, an entity or foundation may also decide to perform an audit even if there is no legal obligation to do so. We will help you find an auditor if you need it.

Employee hiring and payroll

As the company's operations grow, there will be a situation that more resources are needed. Through effective subcontracting, a company can build a functional and efficient entity, but there may also be a need to hire its own staff. When planning to hire a person, you should definitely talk to a knowledgeable accounting firm. Even an experienced entrepreneur can easily get confused with the employment contract, payroll, job costs and various statutory obligations. The main matters to be handled are, statutory insurance (such as accident and group life insurance), occupational pension insurance (tyel) and statutory contributions to the unemployment insurance fund. With regard to work, it is necessary to ensure, among other things, a working time monitoring hundred and, of course, it is also important to ensure that regular salary payments are made directly to the employee's bank account in accordance with the employment contract. An employment contract can also be made orally, but it is not recommended in order to avoid any ambiguity that may arise later about what had been agreed. We will help you get started quickly and safely, ie when you are planning to hire an employee, please contact us.