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Craftsmanship, in the age is going through a shift thanks to the rapid pace of digitalization. As businesses adapt to this era it becomes crucial to understand and follow regulations like GoBD.
GoBD plays a role in this transformation. According to a survey conducted by the Central Association of German Crafts 68% of craft businesses embraced at least one digital method in 2022 a substantial increase from 45% in 2017.
What's behind this change? Apart from the advantages of efficiency and accessibility there are factors at play. GoBD, which stands for principles governing management and storage of books, records and documents has been instrumental in driving this transformation. These principles were established back in 2015. Lay down guidelines for bookkeeping control monitoring processes and procedural documentation.
If you're unfamiliar with GoBD it might appear like a web of regulations. However its core objective is quite straightforward; ensuring transparency, accuracy and integrity in bookkeeping. Every entrepreneur subject, to taxation-regardless of their industry-is obliged to adhere to the guidelines set forth by GoBD.
As a business owner, in the craft industry it's crucial to adhere to the criteria and guidelines set by GoBD regardless of whether your bookkeeping's done electronically or not.
The primary goals of GoBD established by the Federal Ministry of Finance in 2015 are as follows:
Integration: Bringing together existing regulations such as GoBS and GDPdU to create a framework.
Modernization: Adapting to changes brought about by document storage systems ensuring that the regulations remain relevant in todays age.
Uniformity: Establishing rules for storing both electronic data providing clear guidelines for businesses across different mediums.
For craft businesses this means ensuring comprehensive and accurate record keeping practices. The aim is to develop a system that not benefits your business but also satisfies regulatory requirements.
Navigating the complexities of GoBD can be challenging. However breaking it down into core principles can make it more manageable. Here's a detailed checklist that craft businesses can use to ensure compliance:
Principle of Traceability, Completeness and Accuracy: Every business transaction-whether external-should be traceable, through documented evidence. This allows third parties conducting audits to gain an overview of your bookkeeping records and individual transactions.
It is important to ensure that all evidence and documents have a document number, date, amount and include details, about the issuer and recipient. Additionally these documents should be retained for a period of 6 to 10 years.
To maintain bookkeeping that can be easily understood by parties it is crucial to systematically record all entries and make them traceable. It is recommended to keep records for cash transactions and non cash transactions. Furthermore it's advisable to record tax sales from taxable sales.
In order to comply with tax regulations it is necessary to store documents in a manner. Any modifications or deletions made to existing documents should be thoroughly documented. This principle ensures the accuracy and integrity of the records over time preventing any changes.
In todays era there are tools and technologies available that can streamline and improve the bookkeeping process. Embracing a solution for managing data and documents is not only recommended but also a strategic move that offers several advantages.
Accessibility: Digital systems allow you to quickly document data and access important documents from anywhere ensuring connectivity, with your business.
Data security: Modern digital systems provide security measures to protect your data from access and breaches.
Enhanced efficiency: Automated processes can significantly reduce tasks ensuring compliant archiving while eliminating the chaos of paperwork.
Cost effectiveness: Digital systems minimize the need, for physical storage spaces and manual resources resulting in long term cost savings.
Compliance goes beyond rule following: it involves avoiding penalties and ensuring smooth business operations. The tax office may conduct thorough examinations to verify whether your craft business maintains bookkeeping in accordance with GoBD regulations.
However it's important to note that minor violations of GoBD rules do not necessarily lead to consequences. Long as traceability and verifiability remain intact businesses have reason to worry. Significant discrepancies or violations can result in tax assessments often accompanied by substantial back payments and penalty interest.
The world of craftsmanship like industries is undergoing transformation. Digitalization is more than a buzzword: it has become a reality that businesses must embrace. GoBD serves as a testament, to the significance of adapting to this era while ensuring transparency, accuracy and compliance.
Transitioning to bookkeeping and ensuring compliance with the GoBD regulations can be an advantageous process, for craft businesses provided they have the necessary tools, knowledge and approach.
If you can think it, we can do it.
