Don’t put it off until tomorrow… recording of postings in a timely manner

Do you know how long you can hold on to documents before you need to post them? Is there a duty to post in a timely manner, or can a company simply decide when to post invoices. For companies in Germany, this is clearly defined: …

… you must post them in a timely manner. In Germany, this is a well-known fact, because of Germany’s “Generally Accepted Accounting Principles”, or GAAP (German: “Grundsätze ordnungsmäßiger Buchführung – GoB”). There simply is no doubt about it!

Once you have read this article, you will be have acquired the following knowledge:

  • What the legal requirements for the timely recording of postings are
  • How you can find out in SAP if postings have actually been made in a timely manner

Part I of the series: “Recording of postings in a timely manner”

1. Don’t put it off until tomorrow… recording of postings in a timely manner
2. Quick Guide: Three steps to determine if postings are being recorded in a timely manner
3. Analysis of the continuous recording of postings over time
4. How you can notice which business transactions are being left undealt with for a longer period of time

Why should one record postings in a timely manner?

As already mentioned, the recording of postings falls within the scope of Germany’s Generally Accepted Accounting Principles, or GAAP. You can find more details of these in the “Principles for properly maintaining and storing books, records and documents in electronic form and for data access” (German: “Grundsätze zur ordnungsmäßigen Führung und Aufbewahrung von Büchern, Aufzeichnungen und Unterlagen in elektronischer Form sowie zum Datenzugriff – GoBD”), provided by the German tax authorities in their most recent version issued by the German Federal Ministry of Finance (BMF) on November 14, 2014.

Where can I find the principles? 

The “Principles for properly maintaining and storing books, records and documents in electronic form and for data access” are only available in German. But if you are interested, you can download them free of charge here:

BMF - GoBD (external link)

What do these accounting principles (GoBD) say?

Now this is where things start to get official:

“Every cashless business transaction should be recorded as directly as possible after it occurs. According to the GoB, every business transaction should be posted on continuous, ongoing basis over time (Journal). It is contrary to the nature of commercial accounting to restrict itself to the collection of documents and, after a long period has elapsed, to enter the business transactions into basic records or basic books based on these documents.” (Subsection 46 of the GoBD)

Conclusion: Putting things on hold and posting at any time is not an option!

Furthermore, Subsection 47 of the GoBD goes on to say:

“Any period of time, which is not absolutely necessary due to operational circumstances or the circumstances of the business transaction, between the occurrence of the process and its ongoing recording in accounting journal records is questionable. The recording of non-cash business transactions within ten days is unobjectionable (cf. BFH judgement of October 2, 1968, BStBl 1969 II p. 157; BFH judgement of March 26, 1968, BStBl II p. 527 on accounts payable and customers). Because of the requirement for the chronological recording of business transactions, it is necessary to prevent a situation where business transactions are kept in the balance for a long period, thereby opening up the possibility of presenting them in a different way than would have been correct at the time, or of them being lost sight of completely and concluded in the private sphere, which is not subject to accounting requirements. In the case of time intervals between the occurrence of a business transaction and its recording, appropriate measures must therefore be taken to ensure completeness.” (Subsection 47)

The conclusion: A retention period of up to ten days is still OK!

For those who want to know exactly what the law says, we refer our more legally-inclined readers to: Section 146 (1) of the German Fiscal Code, and Section 239 (2) of the German Commercial Code.

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