German bookkeeping and invoicing software

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Hold your horses, you are a Freiberufler, one of the professions listed in §18 Absatz 1 Nr. 1 EStG.

 

This means that as long as you do not run a Kapitalgesellschaft like a GmbH or a Ltd., you:

  1. are not subject to Gewerbesteuer, since you are are not a Gewerbebetrieb, and only Gewerbebetriebe are subject to Gewerbesteuer according to §2 GewStG. Please see here for an article on this.
  2. you do not have to do double-entry accounting, nor submit a balance sheet, you just need to do a simple profit/loss calculation (= Einnahmen-Überschuss-Rechnung, done in the tax form "Anlage EÜR"), this is laid down in §4 Absatz 3 EStG, the "keine Bücher führen" in there means "does not have to keep books". As a Freiberufler you underlie the Zu- und Abflussprinzip according to §11 EStG, this simply means that you tax income when you actually get it (not already when you write the invoice) and that you deduct business expenses only when you actually pay them and not already when you have the invoice for that expense in your hands. Please see here for an article on this

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Now let's try to understand why your Steuerberater is doing what he/she is doing:

 

Telling you that you need to file for Gewerbesteuer:

No explanation for that, unless you have a GmbH/Ltd.

 

Telling you that you need to do double-entry bookkeeping and produce balance sheets: 

All Steuerberater use double-entry accounting software, most use the DATEV software.

This DATEV software is a double-entry accounting software, so you either do the double-entry accounting in it, or import it into DATEV from another double-entry accounting software, which has an export format in the DATEV-format.

 

The reality is that all Steuerberater have all their clients in their DATEV system.

From that double-entry accounting, DATEV generates the monthly Umsatzsteuer-Voranmeldungen (= VAT announcements) automatically, as well as the balance sheets and all necessary tax forms, so beyond doing the double-entry accounting all further steps are automated. 

DATEV also includes a nice but very expensive content and time management system, so you can save the invoices underlying the accounting in it and using it, the Steuerberater can generate invoices at the push of a button. 

So Steuerberater do double-entry accounting for all their clients, even the ones that don't legally need to do it, one approach fits all.

 

I don't think you will find a Steuerberater who would be willing to take your Excel data as input, frankly, doing that would mean that he/she would make a loss on you, since he/she would still need to do the double-entry accounting to get the data into his/her DATEV system and wouldn't be able to charge you for those hours of accounting that his assistant (= Steuerfachangestellte, they have done a 3 year apprenticeship) would need to do, since the Steuerberater would then only be able to charge you for the filing itself which wouldn't cover the data entry cost for his assistant's labour.

 

Exception: if your Steuerberater opted for you to do tax income/expenditure not as they actually happened (= Besteuerung nach vereinnahmten Entgelten), but instead to tax income as soon as you did the work for a client (at the very latest when you write your client his invoice), and expenses when you have got the invoice for them even if you haven't paid for them yet (= (= Besteuerung nach vereinbarten Entgelten), then you do by law have to do double-entry accounting and produce balance sheets, since then you become a case of §4 Absatz 1 EStG, and the Freiberufler privilege of not having to do books no longer applies to you. Some Steuerberater like doing that because that way they can more easily "shift" income/expenditure between years, while in the default "tax it as it happened"-way, you have no leeway at all, there the dates on your bank slips dictates when you have to tax income/expenditure.

But even then you are not bound to this decision and as long as the tax return for that year hasn't been filed yet, you can simply change back to the default for Freiberufler, the simpler "Besteuerung nach vereinnahmten Entgelten".

 

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So what can you do now?

 

Alternative 1: have a Steuerberater do both double-entry accounting and file your tax return

Tell your Steuerberater that you know that you are not subject to Gewerbesteuer (as long as you don't have a GmbH/Ltd., if you do you are subject to it).

If he/she won't admit that, get another Steuerberater.

Cost: paying him/her for the double-entry accounting and the filing, should be around 1,000€ in total.

 

Alternative 2: do the double-entry accounting yourself and have the Steuerberater file

Buy a German double-entry accounting software that exports data in the DATEV format, e.g. Lexware buchhalter (costs 134.99€ incl. 19% VAT, you get back the VAT via your monthly Umsatzsteuer-Voranmeldung) and do your double-entry accounting yourself and send your Steuerberater the data in the DATEV format that he/she needs.

Links to other accounting software in here:

Cost: paying him/her for filing your tax return, that should cost around 400€ + 113.44€ net cost of the Lexware buchhalter software + your time to enter the double-entry accounting

 

Alternative 3: no double-entry accounting, just use Excel and do the tax return yourself

You would calculate your profit using Excel, fill it into the tax forms (completing the "Anlage EÜR" form to fulfil the requirement of a profit/loss calculation) and simply file the tax return yourself electronically.

For that, you would first need to apply for an ELSTER digital certificate with which to "sign" your tax return when you submit it, please see here for instructions (the process has changed in the mean time in that now you can only apply for the digital certificate with your Steuer-ID (that's the number that stays the same all your life and which was communicated to you in a letter from the Bundeszentralamt für Steuern about 6 weeks after you first registered your address in Germany): 

You then use the instructions in the last coloured section of the Toytown ELSTER wiki to fill in the tax forms that you had previously downloaded in the form of the free ElsterFormular filing software (version: "im Gesamtumfang"), and use the ELSTER digital certificate to file it electronically.

Cost: just your time. I estimate that you need about 1 week to do it this way.

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Hey Panda .  I am only keeping my books for US tax reporting purposes which is cash basis not accrual basis.   Because of my small size, there isnt any need for me to generate a formal balance sheet or income statement on a monthly or annual basis..  Right now, I am cash flow focused.  I don't need to report any balance sheet  or income activity to outside sources besides the  tax authorities in the US and Germany

let me contact you via private message on TT with more sensitive details 

:) 

 

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I started up a side business in 2012 here in Germany, and used the WISO program to do invoicing and bookkeeping.  It was okay, but you have to renew your subscription yearly to the tune of 90 Euros.  If you don't, they hold your business data hostage.  I wouldn't recommend it.  Fortunately, my side business was small enough that I could cancel the service and re-do my accounts without too much trouble. 

 

Since I went full-time independent this year, I've been doing all my accounting in a Worksheet on MS Excel.  I keep track of everything in there, works really well.  I also did up a template for offers and invoices in Excel, that I save as .pdf files when I send them to customers via email.  I won't go back to an off-the-shelf program again.

 

 

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10 hours ago, kapokanadensis said:

I started up a side business in 2012 here in Germany, and used the WISO program to do invoicing and bookkeeping.  It was okay, but you have to renew your subscription yearly to the tune of 90 Euros.  If you don't, they hold your business data hostage.  I wouldn't recommend it.  Fortunately, my side business was small enough that I could cancel the service and re-do my accounts without too much trouble. 

 

Since I went full-time independent this year, I've been doing all my accounting in a Worksheet on MS Excel.  I keep track of everything in there, works really well.  I also did up a template for offers and invoices in Excel, that I save as .pdf files when I send them to customers via email.  I won't go back to an off-the-shelf program again.

 

 

Kapakandensis-  That's what I am currrently doing as well with my business too. However, when I spoke with my German Steuerberater  and he said the Finanzamt are adverse to presenting income statements using excel that books should be maintained on a accounting software.

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Let me clarify the Steuerberater's statement:

  • Freiberufler, i.e. people who have one of the professions listed in §18 EStG (like @Alvcpa does, these are professions for which you mostly need a university degree like medical doctor, lawyer, engineer, accountant, teacher, artist, journalist, ...) do not have to keep books at all, they can just use Excel to calculate their yearly profit. Alvcpa's Steuerberater has other reasons for wanting to do double-entry accounting for her, these reasons are related to his workflow, since his software needs double-entry accounting as its input.
  • All other self-employed (well, if they aren't farmers) are Gewerbetreibende, and - if they exceed the limits set down in §141 AO of 60,000€ yearly profit or 600,000€ yearly turnover - have to keep books, which means doing double-entry accounting. And there are some good practice rules called "Grundsätze ordentlicher Buchführung" that regulate how you have to do this accounting. One of the rules is that you shouldn't be able to changes entries once they have been made, so as to avoid somebody cooking the books. In earlier times the accounts were done on paper and there was a bound "main" book (which actually was a big book you wrote into) were you put all transactions in chronological orders, so entries couldn't be changed once they had been made. The problem only appeared when people started doing their books on the PC, where you can anytime change/delete things. So even though you could do double-entry accounting using Excel, as soon as you get audited the Finanzamt will tell you to use a specialised software which has been lobotomised so as not to allow you to change entries. If you made a mistake in a booking and don't realise it before those bookings get "written in stone" (= called "festschreiben", usually done every month before you submit the VAT announcement) you have do an opposite annulment booking (Stornobuchung) to annul its effect, and only then can you do the correct booking. 

 

@kapokanadensis, if your activity is freiberuflich or if it is gewerblich, as long as your profit from it is up to 60,000€ a year, you can continue using Excel.

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@PandaMunich, good tip, thanks a lot.  I'll be under those limits for at least the next couple of years, but if I start getting close, then by that point the 90€ yearly accounting program renewal fee won't be so irritating.  I do my own returns, the cost of hiring a Steuerberater to do them is much more expensive than any tax savings I might realise by using them.  I got a quote of 250€ per month for bookkeeping, and then another 1500€ yearly tax return filing fee.  No way does that make sense with what I turn over in revenues.  So, Excel for bookkeeping for the time being works for me.

 

Cheers!

 

 

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I am also starting as a Freiberufler here in Germany, but I still have very limited German language skills. After reading this post, I decided to try Sage One Start at 8 Euro / month. I log in using Chrome browser, which I set to translate pages automatically. By switching between the translated and untranslated pages, I was able to navigate the setup pretty easily, and I printed and sent my first invoice with almost no issues. I like that the software guides me through the correct choices, so I'm less likely to make a mistake.

One slight hiccup was that when I sent the invoice directly from the website, my client's spam filter blocked it. But I was able to easily download the pdf and email it from my own address later.

translatesnip[.JPG

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On 7/20/2017, 12:30:07, immerLernen said:

 

On 7/20/2017, 12:30:07, immerLernen said:

I am also starting as a Freiberufler here in Germany, but I still have very limited German language skills. After reading this post, I decided to try Sage One Start at 8 Euro / month.

@immerLernen  - I also have very limited German language skills. So is Sage One Start operationally in German and you can auto translate to English, or vice versa?  Are you able to generate VAT reports to file to the German Finanzamt?  Does it have multi-currency functions?

 

 How is easy is it to create customer invoices?  At the moment, I create my invoices on excel and therefore I have flexibility to provide details task descriptions with the invoice amounts.  I wonder if that would be still possible with Sage One Start.  I too worry about using one of these web based accounting software - taking hostage of my business data- in the event I want to switch to another system down the road.   I guess Ill start to search for a demo version somewhere...

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Hi,

 

I would like to ask if in Germany is common to use Practice management software for accountants which allows to manage workflow between accountants and their clients, it has also document management, track progress in the bookkeeping company, run reports etc.

 

Something like those: https://www.practiceignition.com/blog/accounting-practice-management-software

 

Kind regards for your opinions 

 

Tomas

 

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6 hours ago, Tomas BT said:

Hi,

 

I would like to ask if in Germany is common to use Practice management software for accountants

 

Yes, of course - but most German tax consultants work with DATEV, so the program must at least be compatible with DATEV. It's best to ask your tax advisor. 

 

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I’m really happy with Debitoor, multiple language and currency support for the invoices, MwSt Voranmeldungen, a system for my Steuerberater to log-in and access the data in DATEV format, integration with PayPal and card readers, and an English language interface. 

I don’t know if multiple people can access it at the same time though.

 

It also integrates with my bank to import transactions and match them to invoices/expenses, however this is one area where I had a problem. I started using it last year in May, but could only get csv files from my bank for the previous three months. To complete the records I manually entered the first 5 weeks or so of data, but this had to be entered as a separate account in Debitoor as you can’t maually enter data in an account which is being synced. This has really confused my Steuerberater. Not a problem this year though, as everything started on the 1.1.

 

(If anybody does go for it I have a referral code somewhere for some money off.)

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On 3/10/2019, 11:03:25, Dai said:

I’m really happy with Debitoor, multiple language and currency support for the invoices, MwSt Voranmeldungen, a system for my Steuerberater to log-in and access the data in DATEV format, integration with PayPal and card readers, and an English language interface. 

 

A few questions as I haven't checked out debitoor yet...

- does the DATEV export include the PDF attachments (ie receipts/invoices) or just the booking data

- is it double-entry with a complete set of SKR03/04 account available?

 

Sage - Business Cloud Buchhaltung (successor to Sage One...still at same domain)

 

Browser/cloud based.

This seems to be more a full double entry bookkeeping system. 

There were a few issues though that ruled it out for me...

 

- DATEV export is CSV only.  No document export...so will make it difficult to work with your steuerberater (who is probably using DATEV) if it comes to that as all the belegs will need to be stored in some separate document management system and uploaded/mapped separately in DATEV (duplicate work).

- PDF upload doesn't show any preview (ie no side-by-side data entry) and doesn't include any OCR or auto fill.  So you probably need to be opening your bills inbox on a second monitor in a separate program to preview the PDFs as you upload them and do data entry.  

- bank account integrations are broken lately.  Fidor, Commerzbank and N26 don't connect and are "permanently" broken according to Sage support.  This isn't the case with other systems I tested so seems to be Sage specific problem.

- only two predefined invoice templates/layouts.  You can customize the text that gets injected but that's about it.  The default templates are pretty ugly in my opinion.

- buggy.  Ran into lots of random errors during testing and also while trying to cancel my trial.  Chat support isn't particularly helpful and even though I contact them from the Business Cloud Buchhaltung page they tell me they need to transfer me because they don't know this product...so little details like their chat integration being broken.  These little things add up and finding so many during a pretty superficial test means it would probably be a nightmare if I was trying to use the system for serious work.  The poor support when the product is obviously broken completely kills it as a candidate for me.

 

Lexoffice

Browser/cloud based.

This works pretty smooth and has good DATEV integration.  It is also browser/cloud based.

This is really just a data-entry system and not a book keeping system.

Issues:

- No ability to set opening balances.

- SKR03/04 account lists are incomplete and you can't add missing accounts in.  Support says you should just mark booking as "zu prufen" when accounts are missing and have your Steuerberater fix it in DATEV.

- API isn't open...so if you want to integrate for instance to auto-generate invoices based on activity in an external application it isn't possible.  Perhaps you can convince them to give you API access but they seem to be setup to just offer API access to partners creating lexoffice apps that will be available to all lexoffice users.

- No ability to do a manual journal for less standard bookings.

 

Sevdesk

Browser/cloud based.

Good document management. 

You can add missing accounts if you need an SKR account that wasn't included.

DATEV export including documents.

This is also really just a data-entry system and missing accounting features.

 

- It doesn't include basic accounting reportings P&L, balance sheet, etc.

- No ability to do a manual journal for less standard bookings.

 

 

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On 3/28/2019, 2:33:39, matp said:

A few questions as I haven't checked out debitoor yet...

- does the DATEV export include the PDF attachments (ie receipts/invoices) or just the booking data

- is it double-entry with a complete set of SKR03/04 account available?

 

debitoor

I went ahead and tested debitoor myself hoping that it would be a better solution than the ones I already tested.

 

- The DATEV export is CSV without PDF attachments...so that is problematic I think as you will need to maintain separate document management system and your Steuerberater will have to manually load all those documents in and match them to bookings.  (Duplicate work).

- There doesn't appear to be even basic book-keeping functionality.  I couldn't even find a place to set whether I wanted to use SKR03 or 04.  When uploading a booking you have to "click" on categories to categorize it as opposed to having an option to assign it to an explicit account by number.  When you do the DATEV export you select SKR03 or 04...so I guess debitoor guesses the correct SKR03/04 account numbers to use when exporting from the internal debitoor booking categories.  The way this process works means that even if you have a standard set of 10 SKR04 accounts you use for your everyday bookkeeping...you can't assign bookings to these accounts. Your bookkeeper will have to check and re-assign most bookings to the correct account numbers.

 

debitoor really is just a basic data entry system and not a bookkeeping system as a proxy for shipping info to DATEV.   The fact that you don't even have the option to select/use SKR accounts and that the DATEV export doesn't include the PDFs makes this system uninteresting for me.

 

reviso

Thought I would add a comment on reviso since I didn't mention them yet.  Like sage they are more of a full bookkeeping solution.  They were formerly called e-conomic.  Unfortunately there are a few things that really annoy me. 

 

1) is that their app was built with frames and as a single page app breaking built in browser navigation.  You click 6 times to get to a specific page/tool in reviso and then you reload the page and you are back at the "start" of the app because the app doesn't keep any state about which view/page you are looking at in the URL.  If you want to share a link to a specific reviso report with a colleague, you can't copy and paste out of the address bar.

2) Their product/dev teams seem to have really over-complicated parts of the product and this is reflected in terrible usability and user experience in many places.  Customizing invoices is an example.  You have very detailed customization control but mostly through editing a huge form...and you have to repeat the process (and remember the standard values you are using) across the same form for invoices, offers, statements, credit notes, etc.

3) We never used it for full bookkeeping because it was already a nightmare just doing basic setup stuff.

4) Little improvement.  I inherited a reviso system at a previous company some years ago and hated it for the reasons above.  I tested again in January thinking that they MUST have been able to fix these obvious major problems in the last couple years...but it pretty much is exactly the same as I remember it.  This means either they really aren't aware of how bad certain parts of the user experience are...or they don't have the resources to invest in development to improve the product.  Either way...bad sign.

 

 

Once again the system of record for your books will live in DATEV outside of your control.  I really wish Sage would fix the broken bits of their system so we could use Sage for our master bookkeeping...but the Steuerberater could still easily get the data in DATEV to work with when needed (Jahresabschluss for instance).  Or maybe someday Xero will do Elster integration and the other things they need to do to get certified for use in Germany.

 

(warning) rant...

 

- DATEV seems to be the only proper bookkeeping option in Germany and they have a bit of a cartel with their Steuerberaters.

- You can't buy DATEV without the permission/oversight of your steuerberater.  Which means you are forced to hire a Steuerberater even as a very small/simple business.  Your steuerberater has to be a DATEV member...so if you use a Steuerberater that isn't a DATEV member they are forced to join or you can't use DATEV.

- DATEV is primarily an offline/desktop program and only works on Windows.  This of course is bad for collaboration and as most Steuerberater's are not IT/tech-savvy people...there is also a huge security risk that is more present on Windows (partly because it is a larger target).  Ransomware anyone?  The ELSTER tools have the same problem (desktop/windows only).

- Because DATEV is what the Steuerberaters in Germany are comfortable with, they don't really want to use anything else and so as an entrepreneur you are often forced into their way of doing things...which often results in just shoving paper or a google drive folder at them and settling for a PDF report once-per-month.  This is instead of being able to see realtime cash situation, cash-flow forecasting based on AP/AR/balances, automated invoice emailing, automated reminders for overdue invoices etc...ie all the nice things that cloud-based bookkeeping/invoicing (that is updated daily instead of monthly) bring to an entrepreneur.

- There isn't a serious cloud-based tax (let alone double-entry bookkeeping) in the German market that is accessible to startup/entrepreneur level businesses.

- In many other markets (e.g. US, UK) a small business does not need to hire a Steuerberater as long as they understand basic bookkeeping.  The books, documents and even tax filings can be done without a tax attorney for small businesses. 

- In Germany I have come to see that due to the lack of access to DATEV, the lack of quality competing tools and perhaps the exceedingly complex tax regime...you really cannot run a business without giving control over to a Steuerberater.  This adds significant cost and workflow complexity. 

- Maybe I am partly so negative because I have also had really bad luck with Steuerberaters.  In the last couple companies, I have been given outright wrong advice multiple times.  I've even had a Steuerberater tell me he made certain filings with the finanzamt only to find out (by finanzamt letter months later) that he hadn't bothered.  I've also had steuerberaters that were in the middle of handling something disappear and stop responding to emails and texts (on very simple topics). 

- Really is a bit of a nightmare being an entrepreneur in Germany unless you get really lucky with your Steuerberater and don't mind giving up so much control. To be honest DATEV/unreliable-steuerberater hell is a big instigator in us planning to relocate outside of Germany.

 

Sorry for complaining, perhaps I am spoiled because I have done businesses/bookeeping in other countries and see how much simpler the workflow is as well as the startup cost.  People that have only done business in Germany don't know what they are missing so it doesn't bother them.  The DATEV monopoly means that Steuerberaters can't use anything else without significant pain and so it discourages investment in new entrants and further fuels the strength of the DATEV monopoly.  In other markets where you have multiple viable options the bookkeeping/tax people are always looking for better/easier systems and because they have a choice it encourages innovation and new market entrants.  

 

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