GoBD – Overview and Practical Guidelines of the German directive

Even modern startups need traditional accounting. The “GoBD” guidelines apply to electronic books and documents. We’ve set up our processes and data-processing systems based on these guidelines and have created an short overview for you. The German directive “GoBD” stands for “principles for the proper management and storage of books, records and documents in electronic form, as well as data access”.

Which processes are affected?

The GoBD apply to all areas in which operational processes are recorded by means of digital processing techniques. This includes, for example, financial accounting systems, asset and payroll accounting, inventory control and payment systems. All processes should be checked for compliance. This should take place not only in the context of an company audit; it also offers the opportunity to review and optimize core processes.

Four pillar model

These standards apply to all tax-relevant documents that are digitally recorded, used or archived – as they generally are. Responsibility for these guidelines falls to the individual taxpayer. This four-pillar model is useful for providing a basic overview; it thematically sums up the requirements.

What must be included in documents?
Every business transaction, i. e. any legal and economic process, needs to be documented with a receipt. According to the GoBD, it must contain the following information (source: Finance Ministry of Finance).

table for documenting accordingly to GoBD, a directive for digital business in Germany

General requirements – core statements in brief

Traceable:

Every booking must be documented.
Business transactions need to be documented progressively and in retrograde: from the receipt to the tax declaration and the other way round.
The accounting must be comprehensible to a knowledgeable third party within a reasonable period of time, such that this party can obtain an overview of the business transactions and bookkeeping systems.
In order to understand books and records, it is necessary to create informative and complete process documentation; the same applies to work instructions and their implementation.

Complete:

full and gap-free documentation of individual business transactions
secure storage, protection against loss
technical and organizational controls (e.g. recoding and plausibility checks, analyses for gaps or repeat items)

Correct:

Archived documents must conform to the original document.
Presentation up to accounting standards
It must be possible to track business transactions from origin to processing – authentically and seamlessly

Timely:

Business transactions must be recorded promptly after they occur.
Recording of non-cash bookings within ten days
Day recording of bash bookings.
Recording of periodic bookings by the end of the following month

Orderly:

All bookings must be presented in an individual, factual, ordered and assigned
They must be immediately legible.

Unmodified:

A booking or record must be demonstrably unmodified.
No falsifications or deletions that make it impossible to determine which version of the relevant documents is the original.

You can also have a look at our policy concerning data protection for subscription business.