Understanding Accounting: Balance Sheet & EÜR

Bookkeeping is not always easy for small businesses. There is also a lot to consider with regard to the balance sheet and income statement.

To shed some light on the subject for accounting beginners, here is an explanation of the terms:

the balance sheet is part of a company's annual financial statements. If the profit limit (see below) is exceeded (or you are subject to the accounting obligation as a merchant and e.K.o HG, KG, AG, GmbH, as well as UG), a balance sheet must be prepared. The balance sheet is more detailed than the EÜR and has two sides: the assets (assets and utilisation) and the liabilities (capital and origin). If the balance sheet has been drawn up correctly, the assets and liabilities have the same value.

Revenue surplus calculation (EÜR) is a simplified form of profit calculation. Entrepreneurs compare the operating income with the operating expenses and determine the surplus generated in the company. The EÜR can be attached to the income tax return.

Balance sheet & EÜR to choose from

The question that often arises at this point is whether a company balance sheet is necessary or whether a simple EÜR is sufficient for the tax office. Generally speaking, small businesses, freelancers and farmers and foresters are often allowed to calculate their profits using an EÜR. A balance sheet must be prepared if the profit limit is exceeded.

The following values apply:

ERP software helps

Freelancer are generally allowed to prepare an EÜR.
Small business owners: Income < 17,500 euros per year does not have to prepare an EÜR.
Commercial enterprises & associations: Income < 50,000 euros per year, an EÜR is sufficient. Turnover must not exceed 500,000 euros per year.
Agriculture and forestry: Revenue < 50,000 euros annual profit. In addition, the usable floor space value must not exceed 25,000 euros.

Recommended for these and other accounting tasks is - of course - a ERP software. Even accounting beginners can quickly and easily create an EÜR here. This is based on postings created on the basis of posting rules applied by the software. The creation of a balance sheet can also be supported by many ERP solutions. Standard solutions in particular - such as SAP Business One - have the appropriate range of functions to create the necessary analyses. They are able to determine valid figures even with an increasing number of transactions. This is the basis for well-founded decisions.