Accounting differences between US and DE for an LLC/GmbH

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Is there anybody out there who has a background (general knowledge) in U.S. accounting practices as well as in German accounting practices? I am from the U.S., and started an UG here in Germany in September, and am struggling much more than expected with bookkeeping/accounting. I could use some sort of an overview of the main differences & terminology. Before I go into detail, I do want to emphasize that I am working with a Steuerberater, and am receiving expert advice. But, I am also stubbornly independent and insist that I have the knowledge to and am capable of doing everything myself. 


Here are my two main challenges:

1) I have a general understanding of accounting practices in the US, both through studying for my MBA, and also as a business leader for a US company responsible for overseeing and signing off the financial statements each month. I thought this would be an asset for me as a business owner, but I make so many assumptions about how everything works, only to find out later that what I know only applies in the US, and Germany is completely different.

2) I learned German and speak it fluently, but the Accounting terminology in Germany throws me off. It is mostly made up of words I know and can translate, but I can't for the life of me figure out what they might mean in accounting terms.


I may have to just give in and take an accounting class here in Germany and start from the beginning. But, considering that I already have quite a bit of experience on the topic, I would love to avoid that if possible. There are quite a few other things with my business that I would rather be spending my time on.


Has anybody out there faced this challenge? Any tips?




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Did you actually ever do (no, a general understanding is not enough) any double-entry accounting (= doppelte Buchführung)?

With doing I mean doing all the work, i.e. starting off with a pile of invoices and bank statements, entering the accounting records into T-accounts in accounting software and then using these T-accounts to generate the profit/loss statement and the balance sheet.


If yes, and if your German is up to it, this book should answer all your questions, since double-entry accounting is basically the same the world over, there are just some minor differences (so minor, that they do not affect a small business owner):


If no, you need about a year of training, please start by doing this simple tutorial for double-entry accounting:


Simple example how a German Bilanz is created from the bottom line of each of the accounts that make up the Bilanz:



Simple US balance sheet:



In Germany, most Steuerberater use either the DATEV SKR03 accounts framework (in English), with its traditional sorting of accounts:

  • 0: Anlage- und Kapitalkonten (= Assets and Capital Accounts)
  • 1: Finanz- und Privatkonten (= Financial and Private Accounts)
  • 2: Abgrenzungskonten (= Deferral Accounts)
  • 3: Wareneingangs- und Bestandkonten (= Incoming goods and inventories)
  • 4: Betriebliche Aufwendungen (= Operating expenses)
  • 7: Bestände an Erzeugnissen (= Inventory)
  • 8: Erlöskonten (= Revenues)
  • 9: Vortrags- und statistische Konten (= Carry-forward, Capital and Statistical Accounts)

or the more modern DATEV SKR04 accounts framework (in English) where accounts are grouped the same way they appear in the balance sheet, i.e. in the Bilanz:

  • 0: Anlagevermögen (Bestand: Aktiv) (= Capital Assets Accounts)
  • 1: Umlaufvermögen (Bestand: Aktiv) (= Current Assets Accounts)
  • 2: Eigenkapitalkonten (Bestand: Passiv) (= Proprietary Capital Accounts)
  • 3: Fremdkapitalkonten (Bestand: Passiv) (= Outside Capital Accounts)
  • 4: Betriebliche Erträge (Erfolg: Ertrag) (= Revenues) (= Revenues)
  • 5 und 6: Betriebliche Aufwendungen (Erfolg: Aufwand) (= Operating Expenditure)
  • 7: Weitere Erträge und Aufwendungen (Erfolg: Aufwand, Ertrag) (= Other Revenue und Expenditure)
  • 9: Vortrags- und statistische Konten (Bestand: Rechnungsabgrenzung usw.) (= Carry-forward, Capital and Statistical Accounts)

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I have been a bookkeeper in both countries and on a regular basis the  German points I encountered were:


1. Germany requires detailed asset listing  of office clutter such as cheap chairs. The auditors want to see an Excel digital file  or Datev paper printout of the assets (including sometimes even reference books and items with almost 0 resale value) which you are depreciating. There are 'AFA' tables to guide you.


2. VAT rules require you to be vigilant about getting vendors to supply certain details on their invoices to you. So, if you, say, get an invoice form a UK vendor, and it is missing a VAT required detail, contact them back right away and tell them to send a revised invoice with the corrections so you can pay it.  You may apply at year start for a month extension to VAT filings for all the months that year to give you time for this.


3. Bookkeeping for  iffy accounts receivable is different.


4. If you have employees:  many firms want to avoid getting into employee payroll bookkeping detail (even many German bookkeepers do not want to get into employee payroll bookkeeping detail) and so outsource to a Kanzlerei specializing in it. They usually use Datev software and are also used to dealing with the Datev payroll processing firm. Then the internal bookeeper types in the results the outsource firm gives them to the internal system (or Excel sheet if you are on that).


Best of fortune for your business!






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