What are your company's accounting obligations? Here's a straightforward explanation!

As a company director, you have accounting obligations inherent in your business. The law and the Commercial Code require you to keep your accounts in accordance with certain rules, so that you can monitor your company's activity and report on it to the authorities and external partners.

But don't panic, we'll help you to see things more clearly in this article! The accounting obligations are first explained, then classified into broad categories, bearing in mind that they differ according to the size and tax status of the business. Go to the section that applies to you to find out more!

And at the end of the article, we take a look at the famous question of whether or not to use a chartered accountant, and show you some tools you can rely on 😉

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What are accounting requirements?

Mandatory accounting refers to compliance with very specific rules for keeping accounts.

All companies are concerned by accounting, which must be :

• regular
• accurate
• and representative of the company's reality.

Keeping accounts is a legal obligation, which requires you to :

• record in chronological order all transactions affecting your company's assets (purchases, sales, expenses, etc.),
• carry out an inventory at least once a year so that you can observe the existence and value of the items that make up your assets and liabilities,
• draw up your annual accounts,
• record, archive and retain your accounting documents, as well as all supporting documents, for a period of at least 10 years. This is useful in the event of an audit or if you need to prove your figures.

Is it compulsory to keep accounts?

Keeping accounts is a legal requirement for most businesses in France. However, there are exceptions and thresholds to be taken into account.

These include micro-businesses, which are not required to keep full accounts.

In addition, the accounting rules and obligations of organisations vary according to :

• their activity or business sector
• the category to which they belong (BIC, BNC, IS),
• their tax regime, as we shall see below.

The main accounting obligations

Obligations relating to annual accounts

All companies are required to prepare mandatory annual accounts. It must then provide a copy of these accounts, which will be registered by the Registrar of the Commercial Court.

The annual accounts are drawn up at the end of each financial year and must include :

• The balance sheet: this shows all your company's assets and liabilities. It provides information on :
  • inventory levels
  • financial debts
  • receivables.
    
    
• The profit and loss account: this shows the income and expenditure for your financial year. The difference between these two amounts gives you the profit or loss for the year. It includes, for example, sales, purchases and staff costs.
  
  
• General notes: these are compulsory and provide a better understanding of the company. It includes information to help you understand the profit and loss account and the balance sheet.

Bookkeeping obligations

In order to keep track of your company's accounts, you are required to draw up accounting books and keep them up to date. They take the following form:

• The day book: this provides information on movements affecting your assets. You must record changes from day to day. Every transaction carried out must be accurately reported.
  
  
• The general ledger: this is based on the entries in the daybook, but breaks them down according to the chart of accounts adopted by your company.
  
  
• The inventory book: this is no longer compulsory for financial years commencing on 1 January 2016.
  • However, like many business documents, it must be kept for 10 years.
  • As the inventory is still compulsory, we recommend that you draw up an inventory book, so that you have a clear picture of your assets and liabilities.

Accounting obligations according to tax regime

Micro-enterprise companies

Micro-enterprises (formerly autoentreprises) are divided into the following categories

• those in the industrial and commercial profits (BIC) category,
• and those in the non-commercial profits (BNC) category,

for which the annual turnover threshold is set at :

• 188,700 € for the sale of goods, objects, supplies of food to be taken away or consumed on the premises, or the provision of accommodation,
• 77,700 for services and the liberal professions.

They are required to keep :

• a receipts ledger, whatever the activity, specifying for each receipt the name of the customer, the amount collected and the date,
• a register of purchases, for trading activities.

☝ These businesses are not required to keep full accounts. The accounts can therefore be simplified, but must record all financial movements (income and expenditure) in a chronological and unalterable manner.

Companies subject to the normal actual regime

Businesses subject to the normal actual accounting regime include :

• those in the industrial and commercial profits (BIC) category,
• and those subject to corporation tax (IS),

with annual turnover in excess of :

• 818,000 € for the sale of tangible goods, catering or the provision of accommodation,
• 247,000 for the provision of services.

These companies are required to

• keep full accrual accounts (recording receivables and payables) for the entire financial year, including the preparation of :
  • a balance sheet
  • an income statement
  • notes to the accounts,
• draw up a journal and a general ledger,
• draw up an annual inventory.

Businesses covered by the simplified actual regime

Businesses covered by the simplified actual tax regime include :

• those in the industrial and commercial profits (BIC) category,
• and those subject to corporation tax (IS),

with annual sales of less than :

• 818,000 for trading activities and the provision of accommodation,
• 247,000 for the provision of services.

The obligations of these companies are as follows:

• to keep full simplified accounts (commitment accounts, with the option of changing to cash accounts during the financial year), including the preparation of :
  • a balance sheet
  • an income statement
  • and notes to the accounts,
• draw up a daybook and a general ledger,
• draw up a simplified annual inventory.

Companies covered by the controlled declaration system

Businesses subject to the controlled declaration regime include the liberal professions, which are classified as BNC, with revenues in excess of €77,700.

These businesses must keep cash accounts for the entire financial year, but may also opt for accrual accounting.

Their obligations:

• Keep simplified accounts,
• declare profits and losses each year
• keep a journal of business income and expenditure,
• keep a register of fixed assets and depreciation,
• draw up a balance sheet and profit and loss account (but no legal appendix).

Accounting obligations according to type of organisation

Accounting obligations for traders

• keep accounts, as a business registered in the Trade and Companies Register (RCS),
• comply with the rules of the chart of accounts,
• keep a chronological record of all transactions affecting the company's assets,
• draw up invoices under specific conditions,
• carry out an inventory at least once a year,
• draw up annual accounts at the end of each financial year,
• have a bank account dedicated to the business,
• keep accounting documents for at least 10 years after the end of each financial year,
• in certain cases, file the annual accounts with the commercial court registry.

☝ Other more specific obligations must also be taken into account, depending on the size and accounting system of the business. Small and medium-sized companies that meet certain criteria can simplify their accounting presentation, for example.

The accounting obligations of an association

• Keep accounts in accordance with the association's chart of accounts,
• draw up annual accounts.

This is particularly compulsory for associations

• recognised as being of public utility or approved,
• whose economic activity is subject to commercial taxes,
• associations receiving more than 50% of their budget in public funding, etc.

For other organisations, bookkeeping and the preparation of annual financial statements may be optional when they are not compulsory, and are set out in the association's articles of association.

Accounting requirements for the liberal professions

The accounting obligations of the liberal professions depend on :

• the structure chosen for the practice of the liberal profession,
• the tax system chosen.

They also differ depending on whether the profession is practised :

• as a sole trader,
• as a commercial company (SAS, SASU, SARL, EURL) for unregulated professions,
• in a commercial company and/or a liberal practice company (SEL), for regulated professions.

Is it compulsory to use a chartered accountant?

Companies are not legally obliged to use a chartered accountant. As a manager, you can decide to do your own bookkeeping.

However, it is strongly recommended that you entrust your bookkeeping to a professional.

A chartered accountant will support you in managing your business, and at all the key stages of its existence (start-up, development, changes, etc.), while also acting as an advisor.

Using this expert in figures will be invaluable to you not only for proper bookkeeping, publication of accounts or accurate calculation of your tax liability, but also for secure management of your accounting and tax operations.

💡 To make your job easier, have you considered an online chartered accountant?

An online solution that is particularly suited to small businesses, an online chartered accountant combines :

• regular, personalised support from a dedicated expert,
• and access to a secure online space where you can track the progress of your business.

🛠 For example, Ça Compte Pour Moi helps entrepreneurs with all their accounting needs. With its unlimited advice, it helps you to clarify and meet all your accounting obligations and ensures that you comply with current regulations.

How can accounting obligations be managed more easily?

Accounting obligations may seem onerous and restrictive, but they encourage you to produce documents and figures that make it easier to :

• your sales figures,
• evaluate your assets
• and the development of your business.

To ensure that you comply with your accounting obligations, don't hesitate to call in experts or use accounting software. There's bound to be a solution tailored to your needs.

Sage Business Cloud Compta, for example, is a 100% cloud-based software package for very small businesses and SMEs. The tool saves you precious time and makes your operations secure, by automating your processes as far as possible (importing your banking and invoicing data to simplify entry of entries, for example). You'll also benefit from regular updates to the platform to ensure that you remain compliant with accounting requirements. Finally, thanks to its collaborative features, you can work more fluidly with your teams and your chartered accountant.

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In a nutshell

There's no escaping it! Even if bookkeeping isn't your cup of tea as an entrepreneur, it's a legal requirement for all businesses (except micro-businesses).

To draw up your annual accounts or not? As we have seen, your accounting obligations will depend on the size and type of your organisation, the category to which it belongs and its tax regime. You can find out more in our other articles on obligations by type of business.

And to take a calmer approach to your accounting obligations, why not reverse the point of view? A clear view of the state of your assets is also a way of taking into account the reality of your company's health! 💸