How to maintain accounting and tax records for individual entrepreneurs yourself - step-by-step instructions

Who is required to keep accounting records in the Russian Federation?

The answer to this question is given by Art. 2 of the Law “On Accounting” dated December 6, 2011 No. 402-FZ. Those required to maintain accounting in the Russian Federation include:

• organizations engaged in commercial and non-profit activities;
• government agencies, local governments, management bodies of extra-budgetary state funds (including territorial ones);
• Bank of Russia;
• Individual entrepreneurs, private practitioners;
• Representative offices and divisions of foreign and international organizations located in the Russian Federation.

Thus, formally, individual entrepreneurs are classified as economic entities that are required by the state to keep accounting records.

However, in paragraph 2 of Art. 6 of Law No. 402-FZ IP are mentioned among those who may not do this. In this case, a mandatory condition must be met: the entrepreneur keeps records of income and expenses and other taxable items and physical indicators related to his activities.

So what is meant by keeping records mentioned by the legislator in paragraph 2 of Art. 6 of Law No. 402-FZ, and which entrepreneurs are required to keep accounting, and which individual entrepreneurs can rightfully not bother themselves with accounting?

Structural components, goals and objectives

The functioning of an individual entrepreneur involves maintaining three types of accounting, each of which has its own functional characteristics and purpose:

• managerial – an individual entrepreneur is needed for planning and the possibility of organizing further activities;
• Tax accounting is the provision of reports to the tax authorities. In fact, every entrepreneur submits documentation for the reporting period and, based on the data and calculations made, pays taxes;
• Accounting.

Types of company accounting
An important point is that maintaining accounting records for organizations and enterprises is not mandatory - this provision is regulated by the Federal Law “On Accounting” dated December 6, 2011 with current amendments. On the other hand, some report forms are still necessary and, moreover, they help collect data for the tax office.

Thus, depending on the chosen form of taxation and the type of activity carried out (determined by the OKVED code), an individual entrepreneur can determine a list of documentation that must be compiled and stored for a certain amount of time (usually from 3-5 years).

Accounting concept

Accounting solves the following problems:

• business control and the ability to assess its profitability;
• the ability to increase business efficiency by introducing or strengthening those aspects of activity that, judging by reporting, generate more income;
• exercising control over labor resources in the process of work;
• distribution of financial flows is more rational taking into account data from previous reports;
• availability of a real picture of the business - if it ceases to generate profit, the entrepreneur has the opportunity to change profiles or, if necessary, close it so as not to incur losses.

An individual entrepreneur can keep records as follows:

• on one's own. Such management is possible only if the entrepreneur has some understanding of accounting or is on a simplified taxation system. On the other hand, the availability of online programs makes it possible to conduct accounting even on a common system;
• with the help of a hired accountant. This option allows you to contact a qualified specialist, but, on the other hand, many entrepreneurs note that problems arise due to errors in reporting and the dishonesty of some accountants;
• concluding an agreement with an outsourcing company. This method is the most expensive, but, on the other hand, it allows you not to delve into accounting matters at all and practically not worry that a mistake will be made, which could subsequently result in penalties.

What is meant by accounting for income and expenses?

The concept of “accounting for income and expenses” is used in the Tax Code of the Russian Federation, which obliges taxpayers, in cases established by law, to account for income, expenses and their taxable items (subclause 3, clause 1, article 23 of the Tax Code of the Russian Federation). Thus, individual entrepreneurs may not maintain accounting records if they maintain tax records.

Let us remind you that entrepreneurs can apply the following tax regimes in their activities:

• simplified tax system;
• OSNO;
• Unified Agricultural Sciences;
• UTII;
• PSN.

Let's consider which of these regimes provide for accounting for income, expenses and other objects of taxation.

Reporting deadlines in 2021: calendar, table

There are mandatory reports submitted to:

• Pension Fund of Russia in the SZVM form until the 15th day of the month following the reporting month;
• FSS in form 4-FSS until the 20th day in paper form and until the 25th day in electronic form of the month following the reporting period.

Calendar table for submitting reports for individual entrepreneurs in 2021.

If an individual entrepreneur works under the PSN, then a tax return is not required. In case of use of a patent. The payment period depends on the type purchased and its validity period.

Should individual entrepreneurs keep accounting records using the simplified tax system?

Let us turn to the clarifications of the Russian Ministry of Finance (letter dated July 26, 2012 No. 03-11-11/221), whose specialists interpret this situation as follows.

According to Art. 346.24 of the Tax Code of the Russian Federation, simplified persons are required to record their income and expenses in the book of income and expenses of organizations and individual entrepreneurs using the simplified taxation system. Its form and procedure for registration were approved by order of the Ministry of Finance of Russia dated October 22, 2012 No. 135n.

Consequently, the obligatory condition for accounting income and expenses by simplifiers, established by paragraph 2 of Art. 6 of Law No. 402-FZ will be observed, which means that they may not keep accounting.

The following articles will help you fill out the specified tax register correctly:

• “How to keep a book of income and expenses under the simplified tax system (sample)?”;
• “Book of accounting for income and expenses under the simplified tax system in 2018–2019.”

Working on the simplified tax system

Bookkeeping using the simplified tax system is much simpler, since the entrepreneur will only be required to submit one declaration per year.
The deadline for submitting this declaration is April 30 of the following reporting year. When using the simplified tax system Income 6%, an entrepreneur can conduct accounting independently. 6% of total income is required to be paid. You will also need to pay an advance; the amount paid will be taken into account when calculating the annual tax.

There is also an alternative version of the simplified tax system - Income minus expenses. This method implies the need to collect documents that will prove the existence of expenses and their validity. Correct execution of these documents is an important part, without which maintaining the simplified tax system according to such a scheme will be impossible. If the expenses are not justified, or they do not fall into the list approved by Article No. 346.16 of the Tax Code of the Russian Federation, then they will not be taken into account.

Do individual entrepreneurs keep accounting records on OSNO?

This situation is similar to the previous one (letter of the Ministry of Finance of Russia dated July 26, 2012 No. 03-11-11/221).

According to paragraph 2 of Art. 54 of the Tax Code of the Russian Federation, entrepreneurs working for OSNO take into account income and expenses for their commercial activities in the book of income and expenses and business operations of individual entrepreneurs, approved by order of the Ministry of Finance of Russia No. 86n dated August 13, 2002 and the Ministry of Taxes of Russia No. BG-3-04/430.

Read about the tax burden of individual entrepreneurs on the OSN here.

Thus, the condition for accounting for income and expenses (clause 2 of Article 6 of Law No. 402-FZ) is also met here. Consequently, individual entrepreneurs on OSNO, like simplifiers, are free to refuse accounting.

For a comparison of popular tax regimes for small businesses, read the article “What is the difference between the simplified tax system and the OSNO? What is more profitable?

Do I need accounting for individual entrepreneurs on the Unified Agricultural Tax?

The answer to this question can also be found in the explanations of the financial department (letter of the Ministry of Finance of Russia dated August 27, 2012 No. 03-11-11/257).

According to paragraph 8 of Art. 346.5 of the Tax Code of the Russian Federation, in order to determine the tax base for the Unified Agricultural Tax, entrepreneurs are required to take into account income and expenses in the book of income and expenses of individual entrepreneurs applying the taxation system for agricultural producers. Its form and design rules are enshrined in the order of the Ministry of Finance of the Russian Federation dated December 11, 2006 No. 169n. In addition, entrepreneurs on the Unified Agricultural Tax from January 2021 are required to pay VAT. To account for VAT transactions, individual entrepreneurs must maintain a purchase book and a sales book, as well as issue invoices.

An individual agricultural producer has the right to apply the exemption and not pay VAT. Read more about the procedure for applying for benefits in the material “Is VAT exemption valid for agricultural producers in 2021?” .

And again we come to a similar conclusion: individual entrepreneurs on the Unified Agricultural Tax can refuse to do accounting.

The article “Rules for maintaining a book of income and expenses under the Unified Agricultural Tax” will help you correctly draw up an accounting book for individual entrepreneurs on the Unified Agricultural Tax.

Should I organize accounting for individual entrepreneurs on UTII?

But this situation is somewhat different from the previous ones. Indeed, although the norms of paragraphs 6–7 of Art. 346.26, paragraph 9 of Art. 346. 29 of the Tax Code of the Russian Federation require individual entrepreneurs on imputation to, in some cases, record income and expenses (including separate ones), but the procedure for this accounting for imputed persons is not fixed anywhere. In addition, within the meaning of the imputed tax itself, the amount of income and expenses in this case does not matter, since the imputed tax is calculated based on the basic profitability and physical indicator (clause 2 of Article 346.29 of the Tax Code of the Russian Federation).

At the same time, in practice, individual entrepreneurs on UTII may be faced with keeping records of indicators on the basis of which the tax base is calculated (for example, individual entrepreneurs engaged in the provision of household services will have to keep records of the number of employees and working hours).

For those imputed working in the retail trade sector, only documents that record the characteristics of the premises used for business activities can be classified as tax registers with a greater assumption.

In addition, all individual entrepreneurs (including imputators) are required to keep records of other taxable objects that they have (fixed assets, intangible assets, etc.)

One way or another, the Russian Ministry of Finance recognizes that all accountants, regardless of what type of activity they carry out, can rightfully refuse to conduct accounting (letter dated July 17, 2012 No. 03-11-10/29).

The article “The UTII taxation system: the pros and cons of imputation” will tell you about the advantages and disadvantages of this tax regime.

Independent accounting

Accounting for individual entrepreneurs is carried out with the step-by-step implementation of the following actions:

1. Preliminary calculation of business turnover, as well as income and expenses (the best option would be to take a period of one month). This is due to the fact that different amounts of annual turnover may impose restrictions on the choice of taxation system. In addition, some types of OKVED allow you to be on the general system only.
2. Choice of tax regime. This may be a standard system that involves monthly submission of reports, which consists of reflecting monthly turnover, profits, expenses, reports on employees, etc.

   
   Tax systems

   In addition to it, simplified ones can also be used - simplified tax system, UTII, unified agricultural tax, PSN. The choice of system should be approached very carefully, since the amount that will have to be paid in taxes will depend on it.

3. Obtaining information on tax reporting. Such information can be seen both on the website of the tax service, and can be obtained from the inspector of the territorial office where the entrepreneur received the registration certificate.
4. Determining whether the organization will have employees. If there are employees, then some additional documentation will be added to the general reporting, which will need to be submitted to the Pension Fund, Social Insurance Fund and Tax Inspectorate.

   In addition, it should be taken into account that all personnel documentation must be stored for a certain amount of time.

5. Studying the tax calendar - all reports must be submitted strictly on time - even if you are late by one day, you can subsequently pay significant amounts of fines (their amount depends on the type of tax return and how much is covered by it for the current reporting period).
6. Determining the accounting method - independently, with the help of a hired accountant or an employee of an outsourcing company.
7. Monitoring the preparation of reporting, collecting and storing documentation that relates to the business and that which employees of regulatory authorities may subsequently require for inspection.

   
   Options for individual entrepreneur accounting support

   Such documents may include cooperation agreements with counterparties that confirm expenses for payment for goods or services, bank statements, documents relating to hired employees, primary accounting documentation, and reporting related to the cash register.

   This fact is even connected with the fact that after a state of emergency is liquidated, the tax office has the right to request documentation up to three years ago for verification.

The most common forms of reporting are the general system and the simplified one. Maintaining accounting records when using a common system can be difficult if the entrepreneur has never encountered such processes and has no idea about accounting and cash documents.

In such cases, the best option would be to contact an outsourcing company or hire a third-party accountant.

Reporting on the simplified tax system is quite simple even for inexperienced businessmen - the declaration will only need to be submitted once a year (if there are no employees, this action must be completed before April 30).

Payment of tax contributions must also be made before this deadline. The simplified system consists of indicating the income received from conducting activities (the tax rate in this case is 6%).

If an entrepreneur chooses the simplified tax system “income-expenses” (at a rate of 15%), then all cost items for individual entrepreneurs will need to be separately reflected. When indicating expenses that can be taken into account, it is necessary to take into account that they must be included in the list specified in Article 346.16 of the Tax Code of the Russian Federation.

Automated programs

Independent accounting can be done by recording data and making calculations on paper, but it is much more convenient to carry out the entire process in automated programs.

The use of automated programs provides the following opportunities:

• calculate tax amounts depending on the chosen taxation system;
• prepare returns for submission to the tax office;
• prepare bank documentation;
• control payments made to individual entrepreneur employees and those made on separate accounts;
• analyze the activities of individual entrepreneurs (fund turnover, total profit and expenses for a certain period) - it becomes possible to increase the efficiency of business activities or adjust expense items.

The use of automated programs is possible both when connected to the Internet (free online services with some restrictions), and when installing paid licensed programs that have advanced options and do not require constant network presence.

Free reporting services include the following:

1. "Taxpayer Legal Entity". Allows you to manage several individual entrepreneurs at once, generating documents for accounting and tax reporting. Many forms are filled out automatically after entering certain data, and if there are errors, they are immediately displayed by the program.
2. "Info-enterprise". It is used primarily for reporting on companies with up to 100 employees. The program makes it possible to change settings depending on the type of activity, as well as obtain new reporting forms and calculation principles with the help of constant updates.

   
   Accounting through Info-Enterprise

3. "Info-accountant". IP is used on the simplified power supply system and ORN, as well as by low-power enterprises. The program allows you to maintain warehouse records, personnel records and payroll records.
4. “Accounting for settlements and funds.” Can be used by small organizations and individual entrepreneurs on the simplified tax system.
5. "Business Pack". A popular program with which you can generate and print primary accounting documentation.
6. "Simplified." Used to calculate a single legal tax. and physical persons Declarations are generated automatically and at the same time receipts are created for payment at the bank.

Free programs include:

1. 1c accounting. One of the most popular programs that allows you to keep records and support financial transactions.

   A special feature of this program is the ability to configure certain parameters according to the characteristics of a particular company, but with strict compliance with current legislation. Among its disadvantages, some difficulty in mastering and difficulties with data transfer are noted.

   
   Keeping records of individual entrepreneurs in 1C-Accounting

2. "Parus-Enterprise". The program is best suited for small firms and allows you to create accounting, warehouse and personnel records. This system can be installed on several devices, thus creating a local network;
3. "Galaxy ERP". Makes it possible to generate reports according to international standards, and the program is updated automatically when any changes in legislation come into force.
4. "Boss Accountant." Allows you to conduct tax and accounting and create reports according to current legal requirements.

Accounting for individual entrepreneurs on a patent

Entrepreneurs who have chosen PSN for their activities, just like all other individual entrepreneurs, may not keep accounting, since they carry out tax (clause 1 of Article 346.53 of the Tax Code of the Russian Federation) in accordance with the procedure approved by order of the Ministry of Finance of Russia dated December 22, 2012 No. 135n .

For information on individual entrepreneur reporting on PSN, see the article “Individual entrepreneur reporting on PSN - pros and cons.”

IMPORTANT! The absence of the need for accounting for entrepreneurs entails that they do not have to submit financial statements.

Initial accounting balance of individual entrepreneurs

Most often, an entrepreneur decides to do accounting not from the very beginning of his activity, but after working for some time. Accounting to some extent brings an individual entrepreneur closer to the status of a commercial organization. Reputable creditor banks, partners, buyers and clients treat the entrepreneur who does accounting with great confidence.

However, you must comply with regulatory requirements:

• maintain accounting continuously from the date of state registration until the date of termination of activity (Part 3 of Article 6 of the Federal Law of December 6, 2011 No. 402-FZ);
• reflect all facts of economic activity in accounting (clause 6 of PBU 1/2008);
• Reliably and completely reflect in the accounting statements the financial position, financial results of activities and changes in the financial position of the individual entrepreneur (see paragraph 6 of PBU 4/99).

Thus, if an individual entrepreneur does not conduct accounting using the double entry method from the beginning of its activities, then on the date of commencement of accounting, it is necessary to calculate the opening balances for the accounting accounts. When calculating, you will have to take into account all the property, property rights and obligations of the individual entrepreneur related to the entrepreneurial activities of the individual entrepreneur. The calculation must be done using those accounting methods that are prescribed in the accounting policy.

How to keep books of income and expenses

There are a number of criteria that entrepreneurs (and other persons filling out the relevant registers) must comply with when maintaining books of income and expenses:

• books must be kept in Russian;
• each tax period must have its own accounting book;
• all completed business transactions are reflected in the register in full;
• entries in the book must meet the principle of reliability and be recorded continuously and in chronological order;
• as the basis for each business operation, the individual entrepreneur must have a supporting source document;
• it is allowed to keep registers on both paper and electronic media (at the same time, at the end of the tax period, the electronic version of the books must be printed, bound and numbered);
• The rules for correcting erroneous entries in the book must be followed: corrections must be documented, confirmed by the signature of the entrepreneur with the obligatory indication of the date of the correction.

Possible accounting objects for entrepreneurs

It is worth understanding that the accounting registers that entrepreneurs should maintain are not limited to books of income and expenses. Thus, an individual entrepreneur is not exempt (if he has a corresponding obligation, circumstances or objects) from accounting for:

• personnel;
• cash transactions;
• fixed assets;
• NMA, etc.

Individual entrepreneurs may also be subject to the payment of certain taxes (VAT, transport, property tax, personal income tax), contributions to extra-budgetary funds, etc. In this case, he will have to not only maintain the appropriate accounting registers, but also generate reports based on them and submit them to regulatory authorities.

To learn how an entrepreneur can switch to electronic reporting, read the article “How to connect electronic reporting for individual entrepreneurs (nuances)?”

Can an individual entrepreneur, at his own discretion, keep accounting records and submit financial statements?

Despite the right granted to entrepreneurs by Law No. 402-FZ not to conduct accounting or prepare financial statements, many individual entrepreneurs do not refuse accounting. And there are objective reasons for this.

The ultimate goal of accounting is the preparation of reports that reliably reflect the financial condition of the entity. The information contained in these reports is used not only by the state, but also by internal corporate consumers of information (owners, managers, employees) and third-party stakeholders (investors, creditors, counterparties, auditors). These users make certain important economic and strategic decisions based on such reporting.

An individual entrepreneur who does not conduct accounting and does not prepare financial statements may face a number of objective difficulties:

• refusal to receive a loan, investment, leased property;
• refusal of partners to cooperate;
• the problematic nature of control over accounts receivable and payable;
• inability to qualitatively analyze current performance indicators and make important management decisions;
• inability to organize effective financial internal control, etc.

In addition, there may be situations when an entrepreneur will not be able to refuse to maintain accounting records and prepare financial statements for internal corporate reasons. For example, if the individual entrepreneur is part of a holding company that prepares consolidated statements and exercises strict internal control over the activities of its members.

Note that external users (usually for lending and investment purposes) may need accounting statements (forms 1, 2), certified not only by the signature of the entrepreneur, but also by the mark of the tax authority.

IMPORTANT! If an entrepreneur has decided to conduct accounting and prepare financial statements, he can submit them to the Federal Tax Service in the general manner. Tax officials do not have the right to refuse to accept an individual entrepreneur’s financial statements and put a mark on their acceptance on them.

You will find a sample of form 1 in the article “Procedure for drawing up a balance sheet (example)”.

General information ↑

Modern Russian legislation stipulates that all business entities are required to keep accounting records (Article 6 of Federal Law No. 402). In this case, special conditions apply to individual entrepreneurs and persons engaged in private practice.

However, in order for accounting to become an optional requirement, two conditions must be met:

1. An entrepreneur takes into account his income and expenses in a simplified form, which are the object of taxation under the simplified tax system.
2. As the main documentation, an Accounting Book is created, in which information about all inflows and outflows of funds is entered (Clause 1, Article 6 of Federal Law No. 402).

It is advisable to understand the intricacies of maintaining a simplified accounting system under the simplified tax system.

Advantages of Simplification

Of all the tax regimes that an individual entrepreneur can use in his activities, the simplified tax system seems to be the most preferable.

Among its most significant advantages are the following:

1. Accounting and tax accounting in the company is carried out according to a simplified system.
2. It is not necessary for such enterprises to submit reports to the Federal Tax Service.
3. The business owner has the right to independently choose the object of taxation (income (6%) or receipts minus expenses (15%)).
4. The general tax on the results of operations replaces personal income tax, VAT and property tax on individuals.
5. Since the tax period is 365 days, the declaration will only have to be submitted once a year.
6. The tax base can be reduced by the value of intangible assets and fixed assets used in production activities. At the moment of their entry.

These conditions make it possible not only to significantly reduce the costs of doing business and contributions to the state budget, but also to simplify the procedure for implementing accounting policies, which is especially important for small enterprises.

Making the transition

If the company did not select a tax regime during the registration process, then it makes sense to make the transition to the simplified tax system already in the process of activity.

However, this will require the fulfillment of a number of important conditions, including:

In fact, the transition to the simplified tax system is carried out by the entrepreneur voluntarily: if he does not want to do this, then taxes are collected from him according to the general system.

In this case, there are two ways to switch to the simplified tax system:

• during registration, the businessman attaches an application for transition to a simplified regime to the general package of papers;
• in the course of activity, the owner of the company from October 1 to December 31 has the right to submit an application. If all conditions are met, taxes will be collected from the new calendar year according to the simplified tax system.

It is important to emphasize that if at the time of registration the entrepreneur did not have time to submit applications, then he has another 30 days during which he will be able to change the general regime to the simplified tax system (Article 346.13 of the Tax Code of the Russian Federation).

Legal grounds

Issues related to the activities of individual entrepreneurs within the framework of the simplified taxation system are considered in the Tax Code of the Russian Federation and certain federal laws.

This is interesting: Description of forced absence and calculation of earnings during it

In particular, the specifics of the simplified tax system are described in detail in such articles of the Tax Code of the Russian Federation as:

Articles 6-8 of Federal Law No. 402 define the procedure, features and terms of accounting under the simplified tax system, and also formulate the conditions of accounting policy, including with regard to taxes.