Keeping the accounts
All companies must keep records of their accounts.
Accounting means keeping records of the money used to run a business. Accounting may be done internally or outsourced, i.e. the company buys accounting services from an accountancy firm. The form of the business will determine whether the company needs to keep single-entry or double-entry accounts.
Single-entry accounts mainly only describe the company's revenue and expenditure. They include a profit and loss account, but not a proper balance sheet.
In double-entry accounts, every transaction is noted in two accounts. The entries in double-entry accounts give the reason for the movement of money and the bank account used.
Double-entry accounts are used to prepare the profit and loss account and the balance sheet for the accounting year, together with the supplementary information and balance sheet breakdown.
The Auditing Act states that consortia and foundations legally obliged to keep accounts are required to appoint an auditor and have their bookkeeping audited.
Partnerships and limited liability companies must appoint an auditor. If a partnership wants to have more than one auditor, the articles of the partnership must mention how many. In larger companies, an accredited auditor must be appointed (i.e. a chartered accountant or authorised public accountant). A public limited company must always have at least one authorised public accountant and an assistant.
An invoice is a business document that must fulfil the requirements of the Value-Added Tax Act. Instructions on invoicing and the Value Added Tax Act are available on the website of Tax Authority.
Keeping the accounts
The accounting period for businesses is generally 12 months. For self-employed people, the accounting period is the calendar year.
After a new business is set up, its first accounting period may be no more than 18 months. Should the operations of a company end, or if the date of the financial statements is altered, the financial year may be shorter than 12 months.
A financial statement is prepared for the accounting period, which clarifies the company's profit/loss. On this basis, taxes are paid and dividends paid to the company's owners, or losses are stated. It also explains the company's position: its ownership, own resources and loans taken out.
The financial statement includes the profit and loss account, balance sheet, financing statement and supplementary information. The financial statement must be dated and signed.
An annual report is a separate document related to the financial statement, and which has stringent requirements relating to its content.
Storage and submission of documents
Receipts for the accounting period, correspondence relating to transactions and other accounting materials that confirm other transactions must be kept for at least six years after the end of the year in which the accounting period ended. Ledgers, such as stock books, balance sheet breakdowns, general ledgers, journals, other ledgers and accounting inventories that show the period of use, must be kept for at least 10 years from the end of the accounting period.
Limited liability companies and co-operatives must submit documents to the Trade Register of the National Board of Patents and Registration of Finland within two months of the profit and loss account and balance sheet being approved. Other businesses required to submit such documents must do so within six months of the end of the accounting period.
Financial statements are sent directly to the Trade Register or accompanying the tax return.
The Tax Administration sends the financial statement documents annexed to the tax declaration to the trade register.
Forms regarding financial statements are available on the website of the National Board of Patents and Registration of Finland.
Auditing, disclosure and publication
Limited liability companies and co-operatives need to notify the Trade Register of their auditors and deputy auditors. For example, the following companies must submit their financial statement documents to the trade register:
- Public limited companies;
- Foreign businesses' branches in Finland;
- Partnerships with a limited liability company as a partner and general partnerships with a limited liability company as partner;
- Partnerships with a limited liability company as partner and general partnerships with this type of company as partner;
- Other bodies legally obliged to keep accounts and which are subject to certain conditions.
The data content of an invoice is defined in the Finnish VAT Act.
The VAT Act and the Tax Administration website contain guidance on when a seller has to issue an invoice.
eInvoice and eBilling information website provides information on electronic invoicing.
Information about bookkeeping and auditing is provided on the website of the Ministry of Employment and the Economy and EnterpriseFinland.
The Accounting Glossary, or what every business should know about accounting, can be found on the Association of Finnish Accounting Firms website.
Qualified accountants in Finland can be found on the Association of Finnish Accounting Firms website.