Self-employed entrepreneurs: how to organize your accounting properly
Are you worried about accounting red tape? The good news is that micro-entrepreneurs benefit from a number of tax breaks. They don't have to produce an income statement or balance sheet at the end of the financial year, for example. Since they are entrepreneurs, auto-entrepreneurs must still comply with certain obligations to ensure the smooth running of their business. These include issuing compliant invoices and keeping accounting records. If you'd like to know everything there is to know about auto-entrepreneur accounting, follow our guide!
Micro-entrepreneurs are required to keep a record of all revenues generated by their business: the revenue book. This takes the form of a table with 6 columns, indicating :
the date on which the revenue was received ;
the reference of the invoice and the associated estimate ;
customer identity ;
the nature of the service ;
the amount received ;
the method of payment used (cash, cheque, bank transfer, etc.).
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Micro-entrepreneurs are required to keep a record of all revenues generated by their business: the revenue book. This takes the form of a table with 6 columns, indicating :
the date on which the revenue was received ;
the reference of the invoice and the associated estimate ;
customer identity ;
the nature of the service ;
the amount received ;
the method of payment used (cash, cheque, bank transfer, etc.).
This book of receipts can be kept in accounting software, in a book-keeping system or in Excel, based on an official model supplied by Urssaf. It can therefore be digital or drawn up in paper format. In either case, receipts must be recorded in chronological order, with no changes possible.
Keep a purchasing register
Unlike the revenue book, not all auto-entrepreneurs are required to complete a purchase register. Independent contractors who are required to keep one are those who :
provide accommodation services;
sell goods, supplies or foodstuffs for consumption on the premises or as takeaways.
Like the revenue book, the purchase register takes the form of a table listing the expenses incurred by the micro-entrepreneur each year, in chronological order. It contains several items of information, including :
date of purchase ;
the name of the supplier ;
the nature of the purchase ;
its amount ;
method of payment ;
the purchase invoice reference.
Here again, no changes are possible. Likewise, this ledger can be kept on paper or in digital form.
Issue invoices that comply with standards
Auto-entrepreneurs must provide their customers with invoices in due and proper form when providing services or making sales. Each invoice must include a number of compulsory details, including :
invoice date and number ;
the customer's identity, that of the micro-entrepreneur, and its SIREN number;
a description of the product or services provided, the volume sold and the unit price;
the total amount to be paid by the customer ;
the payment deadline, the penalty rate in the event of late payment and the flat-rate indemnity applicable if the customer is a professional.
Self-employed entrepreneurs who benefit from VAT exemption must also add the words "TVA non applicable, art. 293 B du CGI" (VAT not applicable, art. 293 B of the CGI) on each invoice.
If the VAT exemption ceiling is exceeded, this compulsory entry should no longer appear. In this case, the micro-entrepreneur must add :
its VAT number ;
the applicable VAT rate ;
the amount of the invoice including VAT.
All invoices produced by the auto-entrepreneur must be numbered chronologically, without interruption. They must be sent to the customer after the service has been rendered, or when the products have been delivered. To simplify invoicing management, the auto-entrepreneur may nevertheless produce an invoice for several services at the end of each month.
Keeping accounting records
The self-employed professional must keep a copy of every invoice issued for 10 years. This legal obligation must be respected in order to monitor the self-employed entrepreneur's accounts, but also in the event of an audit by the tax authorities. Although micro-entrepreneurs are less subject to this requirement, they must be able to present invoices and proof of expenditure for the last 10 years.
Declaring sales
As well as keeping their own accounts, auto-entrepreneurs must declare their sales according to the frequency chosen at the start of their business. This can be monthly or quarterly. The micro-entrepreneur must then enter the sales (excluding tax) generated over the period in question. This declaration is made online, on the auto-entrepreneur website.
Good to know: when auto-entrepreneurs are liable for VAT, they must also declare it to the government every year.
Open a dedicated bank account to manage your micro-business.
If a micro-entrepreneur generates sales of less than €10,000 for two consecutive years, he or she is not obliged to open a bank account dedicated to his or her business. However, if sales exceed this threshold, you must open one. You can choose between a professional auto-entrepreneur account and a second personal current account.
Choosing a pro account brings real advantages to the auto-entrepreneur, including :
better monitoring of your company's financial health;
the ability to justify income and expenses more easily in the event of an audit;
access to services reserved for businesses, such as a larger overdraft, a payment terminal, invoice management and tools to simplify the auto-entrepreneur's accounting.
By opening a personal or business bank account, micro-entrepreneurs can collect their income, pay their business expenses and deduct their remuneration. In this way, they avoid confusion between their personal money and that generated by their professional activity, and can better monitor their company's cash flow.
There's one rule to follow if you want to manage your auto-entrepreneurial accounting properly: be rigorous. Don't wait for your sales figures to be declared before managing the invoices issued during the quarter. Even if the auto-entrepreneur doesn't have to draw up a balance sheet at the end of the accounting year, he or she must set aside time for bookkeeping. This is essential if they are to manage their business without making mistakes.
This is all the more important as auto-entrepreneurs may be liable for VAT if they exceed the thresholds. They must then invoice their customers, declare it and pay it to the government. Micro-entrepreneurs must keep a close eye on their accounts to anticipate this liability.
Securing your documents
The auto-entrepreneur must ensure the integrity and security of his accounting documents if he wants to keep them over the long term. Indeed, they may lose them during a move or fall victim to a computer breakdown.
To avoid these problems, micro-entrepreneurs can make paper copies of their invoices, or scan them and store them on a hard disk or in the cloud. The latter solution is ideal for easy retrieval of invoices and supporting documents at a moment's notice.
Does an auto-entrepreneur need a chartered accountant?
Unlike companies operating under SAS or SARL status, for example, auto-entrepreneurs don't have to use the services of a chartered accountant to keep their books. In fact, because they operate under asimplified accounting system, they don't need to draw up an income statement or balance sheet at the end of the year. They can therefore keep their own accounts.
Self-employed entrepreneurs: what if you opted for accounting software?
An auto-entrepreneur is not obliged to install online accounting or invoicing software. There is, however, an exception for certain micro-entrepreneurs, who must equip themselves with certified accounting software when they meet the following cumulative conditions:
have a commercial activity with private customers;
are subject to VAT;
use cash register software.
Although they are not obliged to do so, auto-entrepreneurs can use these tools to produce standard estimates and invoices, and save precious time tracking their accounts.
If the auto-entrepreneur's accounting is streamlined, this advantage can quickly backfire on a disorganized professional. Poor budget management can bankrupt the self-employed. Keeping your accounting records up to date enables you to :
check the profitability of your business;
identify your sources of income ;
visualize your expenses;
improve your company's cash flow.
An auto-entrepreneur who keeps his or her accounting records up to date can protect himself or herself in the event of a dispute with a customer or supplier. They can use their accounting documents as evidence in the event of a legal dispute. Good bookkeeping also enables the micro-entrepreneur to check that he or she has not exceeded the sales thresholds, and that he or she can still benefit from the micro-tax regime.
Last but not least, the auto-entrepreneur's accounting records are essential in the event of a tax audit. This enables the tax authorities to check that sales declarations have been made correctly, and that they contain no errors.
