Guide Taxes and bookkeeping

Cash-basis accounts and receipts

Income minus expenses. The rest is keeping things tidy.

6 minutes As of August 2026

Information, not advice. This is general information, not tax or legal advice and no substitute for it. Figures, thresholds and deadlines change with every tax law — check them for your year or ask someone who is licensed. Wherever money or liability is involved, the text says so.

As a small business you don’t draw up a balance sheet but a cash-basis income statement (EÜR): everything that came in, minus everything that went out. It is calculated on a cash basis — what counts is when the money moved, not the invoice date.

What counts as an expense

The purchase price of the goods.
Shipping costs and packaging.
Platform fees.
A share of the costs for phone, internet, software.
Trips to buy stock — with a logbook or the mileage allowance.
Equipment: scale, tape measure, clothes rail, lamps.

Keeping records

Invoices and accounting records must be kept; the periods are set out in § 147 AO (German Fiscal Code) and were changed recently — expect eight to ten years, depending on the type of record and the year. Digital is allowed as long as the records remain unalterable and readable.

What many notice too late

Goods still on the shelf on 31 December are not an expense of the year but stock. Buying big in December to push down profit doesn’t reduce it — it only moves money into a cupboard.