Accounting

What is accounting?

As a self-employed person, good accounting is indispensable. It is a crucial tool for continuously getting and keeping a clear picture of the situation of your activity and/or company. That is essential for making the right decisions in time as an entrepreneur.

Keeping correct accounts is also a legal obligation. Your accounts must provide sufficient information about all income and expenditure of your self-employed activity or company. The accounts are kept on the basis of supporting documents that must substantiate the movements – in and out and internal shifts – (invoices, bank statements, depreciation tables, …). The movements are recorded on accounting accounts or general ledger accounts, such as the expense account (number 60000) or the revenue account with income (the 70000 account).

Accounting can be done according to two systems: single-entry bookkeeping or cash accounting, and double-entry bookkeeping. According to the principles of good governance, double-entry bookkeeping is the norm. Cash accounting is simpler, but also considerably less precise én more prone to errors.

With double-entry bookkeeping, a transaction is always recorded on two accounts. With a purchase, the stock account will increase by the value of the goods purchased, while the bank account will decrease by that amount. One movement exactly offsets the other, which immediately guarantees that the accountant can check that no mistakes are made. Single-entry or cash accounting uses only one movement per transaction. So there is no way to detect an incorrectly written amount.

Annual accounts

When doing business, you and your company come into contact with a great many organisations and people. To assess the situation of an existing or potential business partner, the balance sheet is worth its weight in gold. The balance sheet or annual accounts not only show the situation with the result of each financial year, but also contain (mandatory) information about the directors, location and number of branches, investments and much more. Skipping a mandatory annual publication is already a warning sign for anyone who does or wants to do business with that company. Balance sheets are available free of charge on the website of the National Bank of Belgium (NBB – Central Balance Sheet Office).

Drawback: self-employed persons do not have to file a balance sheet, only companies do. Even as a self-employed person, however, it is best to keep double-entry accounts and draw up an (internal) balance sheet every year. You do not have to publish it, but it gives banks and large suppliers confidence.

Working with your accountant in onFact

In onFact you can give your accountant free access to your account. Via the various direct integrations with accounting software you can effortlessly send purchase and sales documents from onFact to accounting software. This way your accountant can get started on processing them right away.