Simplified accounting for small businesses - accounting system and reporting methods

Organizations belonging to small businesses may enjoy some “indulgences” in terms of accounting. This issue is most relevant for those legal entities that use special tax regimes. What is the concept of “simplified accounting”?

This service can greatly facilitate accounting on the simplified tax system, as well as tax and personnel records, try it to minimize risks and save time.

A simple accounting system for micro-enterprises

Situation: how to conduct accounting using a simple system, without using the double entry method.
Is the organization a micro-enterprise? Record every fact of economic life, that is, the amount of an operation or transaction, in a specially designed register (clause 6 of the Recommendations approved by the decision of the Presidential Council of the NP “Institute of Professional Accountants and Auditors of Russia” dated April 25, 2013 No. 4/13). There is no need to make accounting entries.

Clause 6.1 of PBU 1/2008 gives organizations with the status of micro-enterprises the right to conduct accounting using a simple system, without using the double entry method. However, at present, a clear methodology for this is not prescribed anywhere.

There are also no special registers for maintaining accounting using a simple system. Therefore, the organization can independently approve the accounting methodology and develop the necessary registers. For example, you can take as a basis:

• book of accounting of income and expenses - simplified;

• book (journal) of accounting of facts of economic life in form No. K-2MP;

• book of accounting of income and expenses - for entrepreneurs.

The main thing is to provide in your form all the necessary details established by paragraph 4 of Article 10 of the Law of December 6, 2011 No. 402-FZ. And let such a register be approved by the head of the organization (clause 5 of article 10 of the Law of December 6, 2011 No. 402-FZ). Similar explanations are contained in paragraph 6 of the Recommendations approved by the decision of the Presidential Council of the NP “Institute of Professional Accountants and Auditors of Russia” dated April 25, 2013 No. 4/13.

Fill out the balance sheet by taking data from such registers, as well as the results of a complete inventory of the organization’s property and liabilities.

A micro-enterprise has the right to charge depreciation:

• once a year (when preparing annual financial statements);

• when there is a need to determine the residual value of fixed assets and intangible assets (for example, when drawing up a balance sheet, determining net assets when a participant leaves the ownership (founders), if it is necessary to submit financial statements for obtaining a loan, etc.).

The chosen option must be provided for in the accounting policy.

This is stated in paragraphs 45–46 of the Recommendations, approved by the decision of the Presidential Council of the NP “Institute of Professional Accountants and Auditors of Russia” dated April 25, 2013 No. 4/13.

Situation: should small businesses be guided by Order of the Ministry of Finance of Russia dated December 21, 1998 No. 64n?

Small enterprises have the right to use this regulatory act to the extent that does not contradict current legislation.

In its activities, a small enterprise must be guided by all current regulatory documents. The exception is those acts that directly provide for the right of such organizations not to apply these documents. The standard recommendations approved by order of the Ministry of Finance of Russia dated December 21, 1998 No. 64n are still in force. Therefore, they can be used to the extent that does not contradict the Law of December 6, 2011 No. 402-FZ, accounting provisions, the Chart of Accounts and the Instructions for its application.

This follows from paragraphs 3 and 9 of the Regulations on Accounting and Reporting.

What does the status of a small business entity provide?

Including an organization or individual entrepreneur in the register of small businesses makes it possible to enjoy various benefits and government support measures. These privileges are established at the federal, regional and local levels.

Moreover, we are talking not only about tax benefits. The list of preferences that small businesses are entitled to is much broader. These include benefits when submitting reports and maintaining accounting records, additional protection of funds in accounts, etc.

Register as an individual entrepreneur and keep accounts for a year and submit all reports for free

Chart of accounts

A small business can reduce the number of synthetic accounts in its operating chart of accounts compared to the general Chart of Accounts. For example, you can group data in generalized synthetic accounts as shown in the table:

Apply the remaining accounts in the generally established manner according to the rules established for the general chart of accounts.

This is stated in paragraph 13 of the Standard Recommendations, approved by order of the Ministry of Finance of Russia dated December 21, 1998 No. 64n and paragraphs 3, 3.1 and 3.2 of the information message of the Ministry of Finance of Russia No. PZ-3/2012, paragraphs 9–23 of the Recommendations approved by the decision of the Presidential Council of the NP “Institute of Professional Accountants and Auditors of Russia” dated April 25, 2013 No. 4/13.

Accounting policy

The accounting policy of a small enterprise must be drawn up and approved according to general rules. In it, fix the chosen methods of accounting.

At the same time, small enterprises, unlike others, also have the right to choose:

• method of recognizing income and expenses in accounting in accordance with PBU 9/99 and PBU 10/99;

• the procedure for recognizing borrowing costs in accordance with PBU 15/2008;

• the procedure for correcting significant errors in accounting in accordance with PBU 22/2010;

• the procedure for reflecting in the reporting the consequences of the changed accounting policy in accordance with PBU 1/2008.

And micro-enterprises and non-profit organizations have the right to decide how they will conduct accounting: without using double entry or in a general manner, using accounting entries.

This procedure is provided for by part 4 of article 6 of the Law of December 6, 2011 No. 402-FZ, paragraph 6.1 of PBU 1/2008 and is confirmed by paragraph 4 of the Recommendations approved by the decision of the Presidential Council of the NP “Institute of Professional Accountants and Auditors of Russia” dated April 25, 2013. No. 4/13.

Features of the activities of a small enterprise

The legislation does not establish any specific features of the activities of SMEs. Accordingly, such nuances can arise only due to the use of certain benefits by the taxpayer.

For example, if a small business decides to use the cash method for accounting, then in this case accounts receivable will actually cease to be reflected in the accounting. This means that you will have to monitor this parameter based on information from other sources.

In addition, you need to remember that the cash method in accounting is not at all equivalent to the cash method for the purposes of the simplified tax system. Thus, the amounts of advances received do not form accounting income, whereas under the simplified tax system they will be income at the time of receipt to the account or cash desk (clause 1 of Article 346.17 of the Tax Code of the Russian Federation). Accordingly, such discrepancies must also be taken into account so as not to underestimate the amount of tax or advance payments for it.

In conclusion, we note that all small and medium-sized businesses must periodically check the availability of information about them in a special register maintained by the Federal Tax Service. You can correct incorrect information through the form on the service website. And, of course, it is necessary to track the main criteria that give the right to be considered an SSE in 2021 - revenue, average headcount and restrictions on the composition of participants.

Information about accounting policies in reporting

Small enterprises must disclose information about their accounting policies in the Explanations to the Balance Sheet and the Statement of Financial Results. They also need to decipher all changes in accounting policies that will be applied next year (clause 25 of PBU 1/2008).

As a general rule, the consequences of changes in accounting policies should be reflected retrospectively in the financial statements. That is, correct the accounting data for the entire recalculation period.

However, small enterprises have the right to reflect changes in accounting policies in their financial statements prospectively. This means that they are using the new method of accounting in the current and future periods. There is no need to correct statements for previous years. This right is granted by clause 15.1 of PBU 1/2008 and part 4 of article 6 of the Law of December 6, 2011 No. 402-FZ.

Small business criteria 2021: table

The main criteria for SMP are given in the Federal Law of July 24, 2007 No. 209-FZ “On the development of small and medium-sized businesses in the Russian Federation.” According to the article of this law, they can be both individual entrepreneurs and organizations - LLCs, cooperatives, peasant (farm) enterprises.

The table shows performance indicators for which the taxpayer is classified as a small and medium-sized enterprise.

ATTENTION. Indicators for the share of participation common to all small and medium-sized businesses are determined annually, and their violation immediately leads to the loss of the corresponding status. Income and average headcount restrictions apply cumulatively over three years. This means that a change in the category of a SME entity or loss of status occurs only if at least one of these criteria is not met for three years in a row (clause 4 of article Law No. 209-FZ, clause 1 of the letter of the Federal Tax Service dated 18.08 .16 No. 14-2-04/ [email protected] , letter from the Ministry of Economic Development dated 04/11/16 No. D28i-913).

For example, a company or individual entrepreneur will lose its SMP status (will move to another category) from 2021 if during each of the three previous years (2017, 2021 and 2021) the income and (or) number of employees indicators were exceeded. If both parameters were met in at least one of the listed years, then the status in 2021 is maintained.

Find out the tax system of the counterparty and the amount of taxes paid by him

Recognition of income and expenses

As a general rule, revenue from the sale of finished products (works, services) is recognized in accounting only if the following conditions are met:

• there is an agreement or other document that gives the organization the right to receive revenue;

• the amount of revenue can be determined;

• the organization has received payment for the shipped products, or there is no doubt that it will receive it. For example, an organization has documents (agreement, invoice, letter of guarantee, etc.) on the basis of which it can demand payment for finished products (work, services);

• ownership of the finished product (results of work performed) has passed to the buyer (consumer), the services have already been provided;

• the expenses that have been or will be incurred in connection with this operation can be determined.

If at least one of the listed conditions is not met, then, as a general rule, it is necessary to recognize in accounting not revenue, but accounts payable. An advance received against future deliveries is also not considered revenue.

Such rules are established by paragraphs 3 and 12 of PBU 9/99.

At the same time, small businesses have the right not to recognize revenue until payment is received from buyers (customers). That is, use the cash method of accounting for income and expenses. Such organizations do not wait for ownership of the product (goods) to transfer from the organization to the buyer. This means that advances received must also be included in income. However, all other conditions for revenue recognition must be met.

If an organization recognizes revenue on a cash basis, then expenses must be accepted as the debt is repaid (clause 18 of PBU 10/99, part 4 of article 6 of the Law of December 6, 2011 No. 402-FZ). Meanwhile, such amounts affect the financial result in the general manner - with reference to the income received (clause 19 of PBU 10/99). Be careful: advances issued cannot be reflected in expenses at the time of issue. It is necessary to wait until the counterparty fulfills its obligations, that is, pays off the advance.

An example of how to recognize income and expenses for a small business in accounting

Alpha LLC is a small enterprise and provides consulting services. In March, the cost was 118,000 rubles. (including VAT – 18,000 rubles). . On March 25, the act of accruing VAT was signed.

The cost of services amounted to 70,000 rubles, including:

• salary – 35,000 rubles;
• insurance premiums – 11,970 rubles;
• rent – ​​23,030 rub. (without VAT).

On March 31, Hermes paid for the services partially - in the amount of 60,000 rubles. The buyer transferred the remaining amount (RUB 58,000) on April 17.

Alpha's accounting policy stipulates that revenue is determined as money is received from customers, expenses are recognized as they are paid and reduce the financial result of the current period (clause 7 PBU 1/2008, clause 12 PBU 9/99, clauses 18 and 19 PBU 10/99).

Alpha paid the expenses as follows:

• the rent amount was transferred to the landlord on March 28;
• the salary was issued and personal income tax was transferred to the budget on March 31;
• insurance premiums accrued from salaries are transferred to the funds on April 15.

In accounting, Alpha's accountant made the following entries.

March 25:

Debit 76 subaccount “Calculations for VAT” Credit 68 subaccount “Calculations for VAT” – 18,000 rubles. (RUB 118,000 × 18/118) – VAT is charged on the sale of services.

March 28:

Debit 76 Credit 51 – 23,030 rub. – rental expenses have been paid;

Debit 20 Credit 76 – 23,030 rub. – rental expenses are reflected.

March 31:

Debit 20 Credit 70 – 35,000 rub. – labor costs are reflected;

Debit 70 Credit 68 “Calculations for personal income tax” – 4550 rubles. – personal income tax withheld;

Debit 68 subaccount “Personal Income Tax Payments” Credit 51 – 4550 rub. – personal income tax is transferred to the budget;

Debit 70 Credit 50 – 30,450 rub. - salary was issued;

Debit 51 Credit 62 subaccount “Calculations for work performed (services provided)” – 60,000 rubles. – payment received from the buyer;

Debit 62 subaccount “Calculations for work performed (services provided)” Credit 90-1 – 60,000 rubles. – revenue from sales of services is reflected;

Debit 90-3 Credit 76 subaccount “Calculations for VAT” – 9153 rubles. (RUB 60,000 × 18/118) – VAT is charged on the sale of services;

Debit 90-2 Credit 20 – 58,030 rub. (RUB 23,030 + RUB 35,000) – rental costs and labor costs are written off.

April 15:

Debit 69 Credit 51 – 11,970 rub. – insurance contributions to the funds are listed;

Debit 20 Credit 69 – 11,970 rub. – expenses for paying insurance premiums are reflected.

April 17:

Debit 51 Credit 62 subaccount “Calculations for work performed (services provided)” – 58,000 rubles. – payment received from the buyer;

Debit 62 subaccount “Calculations for work performed (services provided)” Credit 90-1 – 58,000 rubles. – revenue from the sale of services is reflected;

Debit 90-3 Credit 76 subaccount “VAT calculations” – 8847 rubles. (RUB 58,000 × 18/118) – VAT is charged on the sale of services;

Debit 90-2 Credit 20 – 11,970 rub. – expenses for paying insurance premiums are written off.

Choosing the form of tax regime

Small businesses are given the opportunity to independently choose taxation, thanks to which newly created enterprises have comfortable and affordable conditions for their operation.

Small business, like any other legal business, is characterized by its versatility. In small enterprises, as well as in large ones, tax contributions to the state treasury have a significant share in the financial flows of the organization. Neglect of this aspect of doing business results in large financial losses for the company. Therefore, if you are just starting to work or want to optimize your expenses, contact a good accountant, or better yet, become one yourself.

Of course, we can admit that the tax system in the Russian Federation is imperfect, but a reasonable selection of the optimal tax payment method is quite possible.

Today, when creating a small enterprise, it is possible to choose one of several tax systems currently in force, most suitable for the company’s planned activities.

Accounting for interest on loans and borrowings

If a small enterprise acquired, constructed or manufactured fixed assets using borrowed funds, then the interest on them can be taken into account at its discretion:

• or as part of other expenses;

• or as part of the initial cost of the fixed asset.

As a general rule, interest on borrowed funds (targeted loans) strictly increases the initial cost of the fixed asset when the following conditions are simultaneously met:

• the property is an investment asset;

• interest accrued before the fixed asset was acquired, constructed and (or) created;

• interest is accrued before the start of using the investment asset in activities, if the work on its acquisition, construction and (or) creation is not completed.

In all other cases, interest is taken into account as part of other expenses (section II of PBU 15/2008).

However, if the organization is a small business, it can include all interest on loans and borrowings as other expenses. This procedure also applies to interest on those loans and borrowings that were raised for the purchase, construction or creation of investment assets. This procedure is established in paragraph 7 of PBU 15/2008 and part 4 of article 6 of the Law of December 6, 2011 No. 402-FZ.

Who are SMEs?

The phrase “SMEs” stands for “Small and Medium Enterprises”.
These include medium, small and micro enterprises. Also in practice, another abbreviation is used to designate this category of persons - SMP. It stands for “Small Business Entities”. In what follows, we will use these terms as synonyms. Receive notifications about tenders for small and medium businesses

IMPORTANT. All small and medium-sized businesses must be included in a special register maintained by the Federal Tax Service. This register is publicly available on the tax service website at https://rmsp.nalog.ru.

Correcting accounting errors

Correcting errors in accounting for small businesses is easier than in other organizations. Thus, as a general rule, significant errors found after the approval of the annual statements are corrected in the current period using account 84 “Retained earnings (uncovered loss)” (subclause 1, clause 9 of PBU 22/2010). And in current reporting it is necessary to recalculate comparable indicators of previous periods, that is, use the so-called retrospective method (subclause 2, clause 9 of PBU 22/2010).

However, small enterprises have the right to correct even significant errors of the previous year, identified after the approval of the financial statements, differently. Namely, in the current period using account 91 “Other income and expenses” and, importantly, without retrospective recalculation (paragraph 4, sub-clause 2, clause 9 of PBU 22/2010, part 4 of article 6 of the Law of December 6, 2011 No. 402-FZ, clause 22 of the Recommendations approved by the decision of the Presidential Council of the NP “Institute of Professional Accountants and Auditors of Russia” dated April 25, 2013 No. 4/13). That is, act by analogy with the rules provided for correcting minor errors.

For more information, see How to correct errors in Accounting

An example of how to correct a significant error (excessively reflected expense) in accounting and reporting for a small enterprise. A mistake was made last year, the reporting for which was signed and approved

Alpha LLC is a small enterprise. In March 2021, after the statements for 2015 were approved, Alpha's accountant identified an error made in the first quarter of 2015. The accounting reflected the cost of work performed by the contractor in March 2015 in the amount of 50,000 rubles. (without VAT). In fact, the act indicates the amount of 40,000 rubles. (without VAT). The contractor’s work was paid in full (RUB 40,000) in March 2015. Thus, as of December 31, 2015, Alpha had accumulated accounts payable in the amount of excess written off expenses - 10,000 rubles.

Since the reporting for 2015 has already been approved, no corrections are made to it. The error is corrected in the current year’s accounting, but is not reflected in tax accounting. But since Alpha does not apply PBU 18/02, permanent differences are not reflected in accounting.

Alpha's accounting policy states that significant errors from previous years identified after the approval of the financial statements should be corrected without retrospective recalculation and written off as other income and expenses.

The accountant recorded excessively written off expenses in the following way.

March 2021:

Debit 60 Credit 91-1 – 10,000 rub. – reflects the cost of the contractor’s work, erroneously attributed to expenses in the first quarter of 2015.

Results

Features of accounting in small enterprises include the ability to choose between traditional accounting (in full) and simplified accounting methods.

To take advantage of this option, a merchant must meet special criteria that give him the opportunity to obtain the status of an SMP.
You can find more complete information on the topic in ConsultantPlus. Free trial access to the system for 2 days.

Revaluation of fixed assets and intangible assets

For accounting purposes, a small enterprise has the right:

• not to revaluate fixed assets and intangible assets (clause 15 of PBU 6/01 and clause 17 of PBU 14/2007);

• do not reflect the impairment of intangible assets (clause 22 of PBU 14/2007);

• do not reflect the depreciation of financial investments if it is difficult to calculate (clause 6 of PBU 1/2008).

There are similar explanations in paragraphs 7–10 of the information of the Ministry of Finance of Russia dated June 3, 2015 No. PZ-3/2015, paragraphs 7–10 of the information message of the Ministry of Finance of Russia dated February 20, 2013 No. PZ-3/2012.