Can You Handle Company Accounting on Your Own?

Let’s address this question in this article.

All entrepreneurs starting or running a business understand the importance of accounting.
According to the law, all companies registered in any country, including Poland, must maintain accounting records. The responsibility for proper bookkeeping lies with business owners.

Accounting is a systematic collection of all information about a company’s activities and its financial condition. Reports reflect all financial operations, company profits, and losses. These indicators help evaluate the efficiency and financial health of any business. This is the primary goal of accounting.

The data from accounting is used by both internal and external users, including regulatory authorities.

Entrepreneurs’ Interests

Many entrepreneurs aim to manage accounting independently for the following reasons:

• Cost savings – For small business owners, hiring an external accountant can be expensive.
• Full financial control – Entrepreneurs who handle accounting themselves maintain full control over the financial state of their company.
• Better understanding of the business – Managing accounting independently helps entrepreneurs grasp their company’s financial status and understand the financial needs and growth opportunities.
• Quick reactions to changes – Independently managed bookkeeping allows for prompt responses to changes in the business.
• Tax management – Entrepreneurs managing their accounting can adopt more flexible tax strategies, potentially finding better tax optimization options.

Main Tasks of Accounting

The key objectives of accounting include:

• Preparing financial reports such as balance sheets, profit and loss statements, cash flow statements, etc.
• Tax calculation and compliance
• Managerial accounting and financial performance analysis

All reporting is based on accounting records and primary documentation. Reports are interconnected.

IMPORTANT! Every financial transaction carried out in the course of a company’s operations must be backed by primary documentation and recorded in the accounting system using the double-entry method.

What You Need to Know to Manage Accounting Yourself

Bookkeeping in Poland requires knowledge of legislation and compliance with local financial reporting standards (MPR) and International Financial Reporting Standards (IFRS).

Companies in Poland are required to maintain books and documentation reflecting all financial transactions in accordance with the law. Accounting in Poland involves the precise recording of all financial operations and timely submission of financial reports.
Modern accounting is supported by specialized software, so knowledge of such tools is essential.

Additionally, companies in Poland must adhere to tax regulations while preparing financial reports. Tax compliance includes submitting declarations and paying taxes within deadlines.

Entrepreneurs managing their accounting independently must also develop skills in financial analysis and data interpretation.

Risks and Limitations of Independent Bookkeeping

Entrepreneurs with insufficient experience or knowledge may face risks such as:

• Non-compliance with accounting standards or misapplication of tax laws, leading to errors in reporting.
• Failing to meet Polish accounting and tax law requirements, which can result in legal consequences.
• Time and effort: Managing accounting independently is time-consuming and could be a poor use of resources if done inefficiently.
• Lack of independent review: Errors in reports may go unnoticed.
• Missed opportunities: Time spent on accounting could be used for business development.
• Specific knowledge required: A lack of financial expertise can lead to mistakes and penalties.

These risks emphasize the importance of a professional approach to accounting. In case of doubt or lack of experience, it’s advisable to consult experts who can ensure accurate and effective bookkeeping for your company.

Tips for Entrepreneurs

Managing accounting without professional training or assistance can be challenging. To handle company accounting independently, entrepreneurs are advised to:

• Invest in education – Learn the basics of accounting, including double-entry principles, chart of accounts, and financial reporting.
• Use accounting software – Familiarize yourself with specialized programs and online resources for bookkeeping. Automation can simplify the process.
• Seek professional advice – Consult experts when facing complex situations.

Conclusion

What advice can we give entrepreneurs?
If you run a small business with simple financial transactions and have basic accounting knowledge, independent bookkeeping can be an effective solution. However, for accuracy and compliance, we recommend entrusting your accounting to professionals. While self-management is possible, professionals provide expertise and ensure adherence to regulations, minimizing errors and risks.

This is especially relevant for entrepreneurs who have moved to Poland. They may face challenges understanding local laws and reporting requirements, which could lead to fines and sanctions.

If you have questions or need additional consultations, contact us at office@progressholding.pl.