Accounting restoration: where to start?

What does accounting restoration mean?

Restoring accounting involves carrying out a set of actions that will help bring the company’s reporting documentation into compliance with the primary one, restore lost or incorrectly executed papers relating to financial and cash transactions, and bring them into compliance with the law.

Obviously, in the process of restoring accounting, you can encounter a number of difficulties. So, you will have to restore all lost documents: for example, you will have to contact the bank for statements from your current account. And the accounting database in electronic form will have to be created anew or significant changes made to it. This process may take time.

In addition, it may turn out that after restoring your accounting, you will have to pay additional taxes. Their total amount may turn out to be insignificant, but it can be almost impossible to calculate it in advance (it depends, among other things, on the presence of primary documentation).

Content

What is accounting restoration
When is accounting restoration required?
Difficulties that may arise during the recovery process
Who is involved in the restoration?
Where to start the recovery procedure in different situations
Types of Restoration Services
5 steps recovery procedure
Choosing a performing company: recommendations from experts
The cost of restoring accounting records
Restoration of tax accounting
Recovery procedure
Conclusion

When is it usually necessary to restore accounting records for the year?

Full or partial restoration of accounting is required in cases where it is necessary to restore order to all the company’s documentation. Such actions will help avoid negative material consequences in the future. After all, ignoring accounting can lead to huge losses and even blocking of the organization’s accounts.

Restoration of accounting must be done in the following cases:
Loss of primary documentation or accounting information base;
Change of founders. New owners will likely require outsourcing of accounting and tax risks. In crisis conditions, tax claims can hurt the well-being of an organization. Therefore, before selling the property, you need to organize normal accounting. This will present the organization in a favorable light as a company with transparent accounting and without friction with authorities;
Lack of accounting for a long time;
Identification of the fact of incompetence of the chief accountant, his inadequacy for his position;
Detection of errors in primary documentation, its inconsistency with the real financial position of the company;
Detection of errors in documentation by tax authorities, assessment of fines and penalties;
Blocking the company's current account;
Preparing for a tax audit. Most often, company managers do not think about the need for systematic control over accounting. Most directors pay close attention to working with documentation only in anticipation of an audit by tax inspectors or OBEP. But even an emergency “combing” of documents can significantly reduce the risk of large tax claims;
Dismissal of the chief accountant. An incompetent employee can create a lot of problems for you, which will accumulate like a snowball over time, and then erupt into a scandal and a huge amount of incorrectly drawn up or lost documentation.

Accounting restoration will help analyze and adjust accounts, restore tax registers and financial reporting.

The main task of full or partial restoration of accounting is to bring all documentation - from primary documents to final reports - into compliance with the norms and requirements of the law. Documents must be in such a condition that they do not cause any complaints from regulatory authorities. Thanks to such actions, it is possible to minimize the risks that penalties will be applied to the organization or its officials.

Here are a few examples of cases in which accounting restoration is required.

Example No. 1

The company has been operating on the market for many years; the chief accountant, who once completed specialized courses, has always kept accounting records and submitted reports on time. One day, auditors or third-party experts decided to check the accounting and discovered the unreliability of the accounting reports and the discrepancy between the balance sheet items and the real state of affairs. In such a situation, it is necessary to restore accounting, find items that do not reflect reality, identify system errors and create new accounting that reflects the changes made.

Example No. 2

At the very beginning of its activities, the company began to use a simplified taxation system, according to which it was freed from the need to maintain accounting records. The chief accountant, who did not want to do extra work, did not keep accounting as a whole, limiting himself only to the book of income and expenses. But any commercial company is created to make a profit as a result of a certain activity. And you can calculate profits only during accounting. Because of this, strange situations constantly arose: many limited liability companies did not reveal the material result of their activities for many years; Many chief accountants only knew how to work using simplified language; they were not familiar with accounting. In 2013, accounting became mandatory for everyone. Companies that previously did not maintain it had to restore accounting. It implied not only the completion of accounting work for several years, but also the restoration of the balances of balance sheet items needed for subsequent accounting as of certain dates (for example, as of January 1, 2005).

Restoring accounting is a rather complex procedure that requires professional knowledge and an individual approach to each situation.

Read material on the topic: Accounting outsourcing of a company

When you may need accounting restoration services

Restoring accounting is a very labor-intensive task and is designed to replenish the primary documentation, ensure its compliance with the available data in accordance with Russian legislation, restore order by reflecting all financial transactions in accounting and build a full-fledged system in it suitable for further use. Such work often requires a full examination of the tax payments made and the corresponding declarations.

There are many reasons why accounting may need to be restored.

For some reason, accounting records were not kept for a long time.
The incompetence of the accountant was discovered and a replacement was made with a new employee (in this case, all documentation will have to be reviewed and corrected).
Errors were found in the preparation of primary accounting documents and discrepancies with actual economic and financial transactions.
The fired accountant, venting his grievance, intentionally caused harm, which is why all the documentation disappeared when he left (this also happens sometimes).
All primary documentation was lost due to various difficult circumstances: fire, equipment breakdown, damage to databases, etc.

Example from practice.

Andrei Ivanov decided to open his own business and, without delay, registered as an individual entrepreneur (IP), choosing the simplified taxation system (STS).

The choice was justified: many around said that the “simplified” system is a convenient system, no special hassle, you just need to submit a declaration to the Federal Tax Service once a year. Andrey decided that in this situation there was no need to entrust accounting to someone else; he could handle it himself.

Things went well, the project began to make a profit. At the end of the financial year, the individual entrepreneur’s turnover amounted to 84 million rubles. In an excellent mood, Andrey filled out the declaration and went to the tax office.

This is where the unpleasant surprises began. Firstly, the declaration was rejected. Secondly, they reported that Andrey’s case was removed from the “simplified” list back in November, since then his turnover exceeded the limit allowed for the simplified tax system of 79,740,000 rubles. This led to the third and fourth news: individual entrepreneurs have been automatically transferred to the general taxation system (OSNO) since November, and issues with documentation and reporting need to be resolved somehow.

OSNO - the story is more complicated: now you will have to “get acquainted” with VAT, transport tax, and other new conditions. The most unpleasant thing is that accounting was not carried out in a manner consistent with the Basic Principles, and advance payments were not made.

Andrey almost fell into despair, but in time he found information about accounting services in such situations and concluded an agreement with the relevant organization. The auditor company took upon itself all the hassle of restoring VAT and other sections of accounting.

In different cases, the goals for restoring accounting will also be different. For example:

formation of an accounting structure that can be relied upon in the future;
positive audit results for the restored period;
preventing the possibility of seizure of bank accounts;
successful completion of a tax audit.

In addition to preventing such serious consequences, when fines are imposed and company accounts are blocked, restoring accounting will help:

avoid sanctions for incorrect accounting in previous reporting periods;
reduce the amount of tax paid if primary documents were not submitted;
prepare for the upcoming tax audit;
apply accounting information in management accounting;
minimize tax risks;
build a mechanism for working with primary accounting documentation.

Partial and complete restoration of accounting: what is the difference

Accounting restoration is a procedure that includes the reconstruction and processing of various documentation: contracts, payment orders, invoices, receipts, invoices. Papers are prepared from both sides - from the client and his counterparties. In addition, it is necessary to calculate the amounts of loans, accountable income and expenses.

Accounting restoration can have varying degrees of depth and complexity depending on the task and the available information. The procedure is divided into two types: full and partial restoration of accounting.

Partial accounting restoration is performed at specific stages of the process. For example, personnel records, cash transactions, bank payments, etc. can be restored. This type of restoration has a number of advantages: it is more efficient and cheaper.

Full restoration of accounting means working with the internal procedures of the company as a whole. During such restoration, all stages of accounting are analyzed and corrected. Primary documentation for past reporting periods is processed, accounting and tax reports are submitted to the Federal Tax Service, the Pension Fund of the Russian Federation, the Social Insurance Fund, and Rosstat.

Advice for entrepreneurs

If the head of a company realizes the need to restore accounting, then he must order the appropriate service from a suitable organization as quickly as possible. This is due to the fact that the possibility of further functioning of the organization depends on the accuracy of accounting.

The following recommendations are taken into account:

it is important to regularly cooperate with various outsourcing companies that are professional enterprises;
It is advisable to use the services of these companies even in the absence of any problems, since in this case you can quickly identify various errors or violations in different documents;
Only companies that draw up a formal agreement and provide highly qualified specialists for cooperation are selected;
You can contact several companies at once for an independent free consultation to evaluate the services offered;
An audit should be carried out periodically, consisting of checking, studying and monitoring accounting documentation, since in this case you can be convinced of the professionalism of the selected chief accountant, as well as quickly identify errors.

Is it possible to make money on a bank deposit? Read more here.

What is accounting? Answer in video:

Accounting restoration must be performed by experienced specialists. This is especially true if the owner of the company does not have the necessary knowledge and skills for independent verification. Through this process, you can prevent various disagreements with tax authorities.

If you need to restore accounting, where to start?

First of all, it is necessary to establish the presence and determine the condition of fixed assets. To do this, it is necessary to conduct an inventory of funds. If we talk about the general principles of conducting an inventory, then based on its results the actual presence of fixed assets will be established. To determine the value of the funds found, you need to order their independent assessment. Appraisers will provide you with a detailed report detailing the residual value of the assets as well as the length of time the assets have been in operation. Based on this information, you can put assets on the balance sheet and determine the future period for their effective use.

If you own a plot of land on a leasehold basis, you will have to register such a contract with the Main Directorate of the Federal Registration Service.

If the main type of property of your company is federal or municipal state property, then you can contact the property management committee, where the Charter of your organization is stored with attachments in the form of acts of acceptance and transfer of property for economic or operational management.

If your company is a limited liability company or a public joint stock company, you need to find out whether it was converted from state ownership during privatization. If this is the case, company documentation can also be found in the property management committee.

Also carry out an inventory of goods and material assets stored in warehouses and other company structures.

Document recovery process

Restoration of accounting documents at an enterprise is carried out in several stages. The first step is to create an internal commission that analyzes and records the papers that were preserved during the incident. With its help, a list of documentation that is subject to restoration is compiled - this includes all lost official papers, the legally established storage period of which has not yet expired. If the list of lost papers is known, there is no need to create a commission.

If documents were destroyed for reasons beyond the control of the company’s management, then you should write a statement about this to the fiscal authorities, accompanied by supporting certificates. This will not only avoid a possible fine, but also obtain a deferment for the provision of reporting documents while they are being restored. The time required for this depends on the volume and nature of the destroyed documentation.

So, if it was fully stored on electronic media, it can simply be printed in electronic form and certified by the signature of the authorities and the seal of the enterprise. If electronic duplicates are also not preserved, or they were not created, you will need to proceed with a rather labor-intensive process. Restoration of accounting documents at an enterprise is carried out as follows:

The company's management sends a request to the bank to provide an extract confirming the movement of funds in the company's account for the required period. The petition is submitted to the head of the banking organization, it indicates the reason for the request - the need to recreate lost papers. The papers received from the bank contain all the necessary information about the operations carried out by the company, the amounts of money moving in the account, and the counterparties of the transactions.
To restore lost sales and cash receipts, you must contact the supplier company. The resulting duplicate is officially certified by the management of the selling company.
Duplicates of lost financial papers and contracts should be requested from business partners: invoices, concluded commercial agreements, work acceptance certificates.
The tax service requests submitted reporting declarations for the period of interest to the company, with balance sheets and calculations of the financial activities of the enterprise. The corresponding request is sent to the head of the fiscal institution. Tax regulations do not oblige tax officials to provide copies of reporting documents, but if the request is well-reasoned, then Federal Tax Service employees will accommodate the enterprise.

A primary role in restoring accounting documents at an enterprise should be given to the papers needed for drawing up reports to the tax service and various funds. All secondary documents can be recreated later, as needed.

The procedure for recreating lost papers can be carried out by company employees. If the company does not have enough time and funds for this, it would be advisable to turn to the services of specialized firms specializing in accounting and servicing commercial organizations. The specialists of such an accounting firm will be able to restore the necessary documents in the optimal time. The customer will only need to conclude an agreement with her, issue a power of attorney and provide access to the surviving accounting documents.

What are the stages of accounting restoration?

Restoring accounting in specific areas of production consists of restoring calculations for transfers to extra-budgetary funds, calculation of wages, transactions on the current account and cash receipts, accounting for the movement of inventories, registration and depreciation on fixed assets.

The accounting restoration process is divided into the following stages:

The first stage: preliminary processing of documentation, its analysis and sorting. At the same stage, an unscheduled inventory is carried out, with the goal of restoring goods and material assets, as well as accounting for fixed assets; then technological solutions are developed for accounting, development of accounting policies and other regulatory and accounting regulations.
Second stage: search for missing documents, their restoration and processing. At this stage, accounting and reporting registers are formed: adjustments are made to existing registers or, if they are completely absent, the registers are compiled anew.

During the restoration of the company's accounting, documents will be analyzed, document flow will be organized, and updated reporting will be submitted for the period subject to restoration. The accuracy of tax calculations, further preparation of declarations, and organization of accounting in accordance with legal requirements will be checked.

Gaps in the provision of accounting and tax reports are filled through the submission of adjusted accounting forms and updated tax returns. During this process, information will be generated that can later be used when submitting quarterly and annual reports to the Federal Tax Service and extra-budgetary funds.

The restoration of accounting will be carried out by specialized accountants, programmers and auditors. The latter will prepare primary documentation, set general tasks, analyze ways to reduce the tax burden, and accept completed work. The task of programmers is to develop software that can help restore accounting.

In general, the following processes are performed at this stage:

Receiving and analyzing primary documents, recovering lost papers (if required). The scale of the work largely depends on the number of documents, including missing ones, the volume of the company, the number of branches and some other factors;
Creation of accounting software (if necessary). Application databases can be completely restored, even if they were seriously damaged or missing altogether. Sometimes not only the direct restoration of documentation is carried out, but also information and technical measures are applied;
Drawing up and submitting reports and declarations, renewing personnel records, calculating salaries;
Reconciliation and other processes, including submission of responses to regulatory and supervisory services;
Drawing up reporting documents and without data. Involved experts will provide you with information and technical support and protect you from further force majeure and emergency situations.

Based on the results of the procedure for restoring accounting and tax control, you will be able to:

Analysis of documents and bringing them into proper form;
Checking the accuracy of tax calculations, drawing up updated tax reports;
Submission of updated accounting and tax reports for the specified period;
Restoration of primary documentation, correction of the accounting database.

After accounting has been restored, you will be able to submit truthful reports to participate in competitions and tenders. Also, restored accounting will help you correctly assess tax risks.

Read the material on the topic: Remote accounting: pros and cons

How is accounting restoration carried out?

The complete recovery procedure takes place in several main stages:

Assessment of the state of accounting. You should always start with an accounting assessment to understand what documents will need to be restored, what errors to correct, and whether it would be easier to carry out a complete restoration.
Inventory of assets and liabilities. It is not mandatory from a legal point of view, but is necessary to verify accounting registers.
Identification of unsubmitted reports. This is a particularly important point, because undetected loss of documents entails fines and other problems.
Reflection of initial account balances in the software product. To form a full balance sheet, accounting entries are generated.
Formation of accounting registers and balance sheet. After the initial account balances are formed, they are posted to the corresponding lines of the balance sheet.

Is it necessary to carry out an inventory when restoring accounting?

The Accounting Law and the regulations on its maintenance define situations in which inventory is a prerequisite:

Renting out property;
Purchase or sale of property;
Reorganization or liquidation of the company;
Reorganization of a state unitary enterprise or municipal unitary enterprise into other forms of ownership;
Preparation of annual accounting reports;
Change of founders or owners of the company (on the day of acceptance and transfer of affairs);
Identification of facts of theft or damage to property, abuse of it (as soon as the facts have been established);
Natural disaster, fire and other force majeure circumstances.

The inventory is ordered by order of the director of the company, who also appoints an inventory commission, which may include employees of the administration, accounting department and other experts capable of assessing the state of the company’s property and obligations. The order must indicate what kind of property and what obligations will be checked by a specific commission.

Before proceeding with the inventory, the accountant must provide the commission with accounting information fixing the list and price of the company's property. The accounting registers must indicate:
Date and name of a particular business operation;
The amount of a particular business transaction;
Account balances at the beginning and end of the reporting period.

The chairman of the inventory commission endorses receipts and expenditures and makes a note on them “before inventory on (date).”

These papers help the commission determine the price of the company's property and liabilities at the time the inventory process starts. This information is entered into inventory records and acts (line “According to accounting data”).

An inventory list (act) is a document that reflects the results of the past inventory. Each type of property must be recorded in its own form.

The inventory of property is carried out with the participation of persons bearing financial responsibility for the property (storekeepers, cashiers). These employees are given receipts stating that the received assets have been capitalized, the released assets have been written off, and all primary documents for them have been submitted to the accounting department.

The inventory must be signed by all commission members and company employees who are responsible for the integrity and safety of the property. If the document is not endorsed by all these persons, the inventory results will be considered invalid. Inventory documents are stored in the company archives for at least five years.

The actual availability of property held by the company at the time of inventory is verified by simple counting, weighing and measuring.

If the inventory takes several days, the warehouses are sealed each time the commission leaves.

Before conducting an inventory of fixed assets, the following is checked:
The fact of filling out inventory cards, books and inventories;
Availability of technical passports and other documentation for assets;
Availability of documents for assets handed over or leased.

During the audit, the commission will inspect the assets and enter into the inventory their full names, purpose, inventory numbers, basic operational characteristics and technical information. Inventory of real estate involves checking documents on ownership of them.

The inventory commission must enter information regarding the company's main assets into the inventory in form No. INV-1. If an asset has been reconstructed, modernized or re-equipped with a change in purpose, then it is entered into the inventory in accordance with the updated data.

Objects of the same type (machines, tools, household equipment, etc.) are included in the inventory in groups. Machines, equipment and vehicles are recorded separately, indicating serial numbers, registration data, year of manufacture, purpose, power, etc.

An inventory of fixed assets located outside the company at the time of the audit (for example, vehicles in transit or undergoing major repairs) is carried out until the moment of their departure.

The company's main assets that have fallen into disrepair and cannot be restored must be described separately. The document lists the dates when the objects were put into operation and the reasons why they fell into disrepair (damage, long service life, etc.).

Read material on the topic: Types of tax audits and their features

Resuscitation of lost accounting

When taking on a new position, an accountant often discovers the flaws of his predecessor. As a result, instead of conducting current affairs, he will have to deal with checking documents and restoring records.

Accounting is close to death

Often, after finding a job, the chief accountant finds complete chaos in the affairs of the organization: many documents were drawn up incorrectly, need to be double-checked, or are completely lost. As a rule, the previous accountant’s chair is already empty and no one is responsible for accounting at the enterprise. Disorder with documents may be caused by force majeure, irresponsible or deliberately negligent attitude of the previous head of the accounting department to his duties. As a result, the loss of primary documents, invoices, pay slips and many other documents. In such a situation, you have to restore the company's accounting from scratch.