21. Juli 2022

This is why you need procedural documentation

Being on the safe side in the event of a tax audit means to have procedural documentation. If it is set up correctly, it will bring you tangible advantages, even beyond a tax audit. Here you can find out why.

Why you need procedural documentation

All taxable entrepreneurs must comply with the tax and non-tax accounting and recording obligations. Procedural documentation provides evidence that the accounting and recording obligations are properly observed. Everything that is relevant for financial accounting and taxation is documented in writing; this includes, for example, documents on merchandise management, e-mail correspondence with accounting reference, interface descriptions, documents on payroll accounting and time recording in your business.

With procedural documentation you document your recording obligations

Our experience teaches us that, since the GoBD* was enacted, auditors place increased value on the individual organisation of business processes and the use of IT. You can make this transparent through procedural documentation. Think of the procedural documentation as a manual that the auditor will certainly request so that he can understand and check the company processes.

This can happen to you without procedural documentation.

From the auditor’s point of view, the formula is this: without procedural documentation, there is no traceability and no verifiability of digital bookkeeping and other tax-relevant records. This will lead to a formal deficiency in the bookkeeping. If an auditor finds material errors in the bookkeeping and no procedural documentation has been submitted to him, then in the worst case the bookkeeping may be rejected with considerable additional tax payments.

Procedural documentation offers you tangible advantages

It is a question of perspective, which is why our pragmatic tip is this: Consider the procedural documentation as (another) basis with which you can analyse and further improve your processes. As an analysis tool, procedural documentation provides valuable services for optimising your business processes. In any case, it is too good for the drawer.

In our latest blog article “Procedural documentation helps – a field report“, we describe a concrete case from our practice of how the procedural documentation saved our client from a negative outcome of a tax audit despite deficiencies in the cash records. We have now had this experience repeatedly.

Further information on the topic of procedural documentation can be found in the enclosed brochure.

* GoBD – Principles for the proper keeping and storage of books, records and documents in electronic form as well as data access

Bruno Höveler

COO, CTO, Partner, Steuerberater, Fachberater für Unternehmensnachfolge (DStV e.V)

Lars Rinkewitz

Prokurist, Steuerberater, Diplom-Kaufmann


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