An important issue, and not just starting January 1, 2017!
Have you heard anything about the principles of data access and the verifiability of digital documents?
If not, or if you only know a little about it, you should get to know the term right away and quickly.
Because it’s not your system or software supplier who’s responsible for complying with the GoBD, but rather YOU, as the party responsible for paying taxes.
The German “basic principles on the proper keeping and storage of financial books, recordings and documents in electronic form as well as data access” (GoBD, (“Grundsätze zur ordnungsmäßigen Führung und Aufbewahrung von Büchern, Aufzeichnungen und Unterlagen in elektronischer Form sowie zum Datenzugriff”), which took effect on January 1, 2015, define the requirements for proper bookkeeping and other associated records when using IT/computer systems, including cash register systems. It replaces, expands upon and tightens the specifications applicable until 12/31/14, i.e. the German “basic principles for proper IT-supported bookkeeping systems” (GoBS, “Grundsätze ordnungsgemäßer DV-gestützter Buchführungssysteme”) and the German “basic principles on data access and verifiability of digital documents” (GDPdU, “Grundsätze zum Datenzugriff und Prüfbarkeit digitaler Unterlagen”).
The new rules apply not only for double-entry bookkeeping, but also for other tax-related data records in particular, such as those created by your cash register system. The GoBD pertains to all so-called preliminary and auxiliary systems for bookkeeping, such as cash register and time-recording systems, material and product management and payroll accounting.
What does that mean for you?
Since 2002, the tax authorities have required the preparation and archiving of data in a digitally analyzable form for auditing and storage for the period of time specified by law (previously the GoBS and GDPdU).
What was originally only applied to financial and payroll accounting data now also applies to upstream or downstream systems such as material management and cash register systems without exception.
Since the introduction of the IDEA auditing software in business auditing by the tax authorities in Germany, a company’s bookkeeping records are now looked at immediately by the company’s own IT department. The data can be analyzed directly on site for its plausibility and show comparative values with similar competitors. The efficiency gained through testing in this way certainly ensures that the number of tests will continuously increase in the future.
The financial authorities place stringent requirements on recording obligations and the unalterability of databases in particular.
Businesses which are not set up for digital verification don’t just risk sanctions from the financial authorities. They can also expect high personnel and financial expenditure for subsequent data processing.
In addition, a host of common file formats (such as Excel tables, PDFs etc.) and the digital storage of receipts (storage form and location) do not fulfill the procedural requirements of the financial authorities without taking further measures. In addition, the recording obligation also extends to master data, which affects their sales bookings or IT-based records. All saved information must be traceable, such as through historiography, logging and process documentation.
More stringent requirements for restaurants
The German Ministry of Finance requires years’ worth of continuous documentation, especially in industries such as the restaurant sector, where customers primarily pay in cash.
This is why restaurants and small businesses providing accommodation are checked especially intensively by officials. The reason? Cash transactions are easy to manipulate.
Electronic cash management, in particular, is subject to stringent criteria. This is why the requirements for proper bookkeeping were tightened further with the GoBD and exceptions to the rules (until then) done away with.
Example: Cash register data must be readable by the auditor using the IDEA auditing software in accordance with the GoBD and may not be saved in compressed form. Individual receipts may not be deleted, even if an end-of-day total receipt is generated. Saving receipts and bills on paper alone is no longer allowed. Documents such as operating instructions, programming logs and procedural documentation must be presented during an audit. It is also recommended that the concrete time periods and usage locations of a cash register be logged.
There are special rules for cash register systems until December 31, 2016, but the clock is ticking: For systems which can already be upgraded now to fulfill the requirements of the GoBD, the transition rule does not apply.
Not everyone is well prepared
From our own experience, we know that not every company with a professional cash register system is well equipped for an audit. This means that many businesses are not in a position to verify that they have carried out bookkeeping in a proper and continuous fashion. In certain situations, this can be expensive, as even smaller objections have been reason enough for financial auditors to reassess the income of a restaurant, and this can result in back taxes. This is why restaurants with an older cash register system should quickly check to see if it can be upgraded.
If you’d like to learn more on this topic about our Matrix POS cash register system, please contact us using the form below. We’re looking forward to hearing from you!