The Accounting Act (1999:1078) - purpose and application

The Swedish Accounting Act 1999 1078 regulates how a company's accounts should be prepared. Here you can read about the requirements and regulations based on the law as well as the application and penalties for violations.

Purpose of the Accounting Act

The purpose of the Accounting Act is to provide guidance to companies on their accounting obligations by setting out the requirements and rules of accounting. The Accounting Act is a so-called framework legislation, which means that the rules are general and limited according to more general principles.

By supplementing the law with standards and practices, it can answer many different questions in the field of accounting, without the law becoming too extensive but at the same time complying with good accounting practice. The standards include general advice and recommendations from the Financial Supervisory Authority, the Swedish Accounting Standards Board or industry organizations.

The basic requirements

There are some specified, basic requirements under the Accounting Act that apply to both manual and computer-based accounting.

Consistency requirement - the accounting system should be transparent, allowing all business events to be tracked.

The completeness requirement - all business transactions and other accounting entries must be recorded on a continuous basis, each with a supporting document.

The access requirement - explained in the filing rules where the accounts must be filed within the country, in the correct order and in a secure way, and how data may be transferred. It must also be legible.

Preservation requirement - the accounting records must be securely preserved and all recorded accounting information must be permanent. Systems and machinery must also be preserved so that accounting information is available in a readable form.

How the accounting law is applied

The Accounting Act states that natural persons with individual business activities are obliged to keep accounts. Limited companies, economic associations and partnerships are always obliged to keep accounts. This means that all business events must be recorded in both a basic book and a general ledger and in a systematic manner. In addition, everything that is recorded must be verifiable and saved within the country for 7 years.

There are also requirements regarding the information the invoice should contain and when it should be recorded. The law also requires you to draw up annual accounts or an annual report.

What should be recorded are business events, which are anything that affects the finances of a company or business, such as changes in assets and liabilities or when an income or expense is incurred.

Every recorded business transaction requires verification, i.e. an invoice or a receipt. This also applies to internal transactions, such as the depreciation of company equipment. You also need to record the movement of money within the company and be able to verify it.

Exceptions to the Accounting Act and specific situations

There are some exceptions and special situations that are exempt from the Accounting Act, although they are quite few. For example, foundations, non-profit associations, community associations and registered religious communities may be exempt from the accounting obligation. In this case, the law requires certain conditions to be met, such as limited assets.

Another exception is if the company handles cash and has a certified cash register. In this case, the actual handling of the cash does not need to be recorded. People who rent out private residential property are also exempt.

In addition, there are some exceptions for non-cash transactions where accounting can be delayed for a certain number of days. This is often between 50-60 days. This could be if the annual turnover is no more than one or three million Swedish kronor. The amount determines how many days you can postpone the accounting. Other factors include the number of supporting documents and business events, as well as cross-border transactions within the EU.

What does the Accounting Act say about archiving?

In short, all receipts and invoices should be saved as you received them. This means that according to the Accounting Act, paper receipts and digital receipts are saved as they are. A digital receipt is not valid if there is only a paper copy of it and not in digital form.

If you scan a paper receipt or paper copy for filing, you must still keep both. According to the Accounting Act, the scanned copy is kept for 7 years and the original is only kept for 3 years.

Previously, the Accounting Act required archiving for 10 years but this has been reduced to 7 years under the new Accounting Act. The new law changed the rules to expand the possibilities to both manage and archive financial information electronically.

The difference between accounting law and accounting rules

The rules and requirements of the Accounting Act and the rules for accounting are not the same. As we mentioned earlier, the Accounting Act requires the correct handling of invoices, receipts and other documents that have in some way affected the company's finances. An outsider must be able to check that both the validity and the results contained in the accounts are correct.

The accounting rules are somewhat broader and include more than just bookkeeping. There are also reports and documents that you must be able to account for if the company has used them for any decision in the business. According to the rules, it is also the accounts that you must submit and be able to present to the authorities, such as the annual report and the tax return.

Accounting crimes and what the accounting law says

Failure to comply with the Accounting Act can have quite serious consequences, i.e. traders can be punished for failing to comply with their accounting obligations.

Examples of different accounting offenses are if you:

1. not recording business events
2. throwing away receipts and other supporting documents
3. provides incorrect information in the accounts
4. do not prepare the annual accounts of, for example, limited liability companies or certain foundations.

The penalties for accounting offences depend on whether they are minor, normal or serious accounting offences.

1. Minor crime - fine or imprisonment for up to six months
2. Ordinary crime - imprisonment for up to two years
3. Serious accounting offences - imprisonment for six months and up to six years

What is required for a conviction for an accounting offense is that the offense must be intentional or that the trader has negligently failed to comply with the accounting obligation. In such a case, it is not possible to follow a given course of the business, its financial position and results. Therefore, it is important to keep the records up to date and accurate.

Simplify bookkeeping with the Mynts business card

Anything that can help simplify bookkeeping is of course welcome. Since accounting entries in a company must be made continuously, it can be quite time-consuming if there are many business events and transactions. With Mynts company card, you get both a simple and effective solution for how to book all expenses. Mynts company card is directly linked to the accounting, which means that the expenses are both registered and categorized automatically and with it also the VAT calculation. You also get digital receipt management and full control of your expenses in real time. Free for up to 10 users.

Sources

The tax authorities

‍The tax authorities

Eco-crime

The tax authorities

Björn Lunden

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