Bookkeeping for small businesses in Germany: the basics

As a small business (Kleinunternehmer) in Germany you normally keep a cash-basis profit statement (EÜR): you record business income and business expenses, keep the receipts in order and send the EÜR electronically with your tax return. An obligation to keep double-entry books with a balance sheet only arises if other laws require books from you, or the tax office asks you to after you exceed the limits in section 141 AO. This article covers the basics: what you have to record, how to keep it in order and which limit applies when.

Last updated: 26 October 2026

The essentials in brief

Profit calculation: if you are not required to keep books and do not keep any, you can state the surplus of business income over business expenses as your profit (section 4 (3) EStG).
Small-business limits: turnover is VAT-exempt up to 25,000 euros in the previous year and 100,000 euros in the current year (section 19 (1) UStG); in the founding year the limit is 25,000 euros, and the very sale that exceeds it is already taxable (section 19.1 (3) UStAE). That is a VAT rule; it does not exempt you from calculating your profit for income tax.
Duty to keep books: with total turnover above 800,000 euros or profit from a trade above 80,000 euros, once the tax office asks you to (section 141 AO).
Order: individually, completely, correctly, in good time and in order (section 146 (1) AO); the rules of order also apply if you keep records voluntarily (section 146 (6) AO).
Retention: as an EÜR filer you also keep the documents named in section 147 (1) AO; accounting vouchers for eight years (section 147 (3) AO).

What do I have to record as a small business?

You record what you take in and spend. Business expenses are the costs caused by the business (section 4 (4) EStG). Pass-through items that you collect and pay out in the name and on behalf of someone else are left out (section 4 (3) sentence 2 EStG). If you buy fixed assets, you list them in special, continuously kept registers with the date of purchase and the acquisition cost (section 4 (3) sentence 5 EStG); see EÜR depreciation and low-value assets.

For cash payments, record cash receipts and cash payments daily (section 146 (1) sentence 2 AO). Recording each single sale is not required for goods sold to many unknown persons for cash, as long as you do not use an electronic recording system within the meaning of section 146a AO (section 146 (1) sentences 3 and 4 AO).

Cash in and cash out: which year does an amount belong to?

In the EÜR the year in which the money moves counts: income is received in the calendar year in which it reached you (section 11 (1) sentence 1 EStG), and expenses are deducted for the year in which you paid them (section 11 (2) sentence 1 EStG). A December invoice that you pay in January therefore belongs in the new year. For the VAT limits you count differently: total turnover is calculated on the basis of fees received (section 19 (2) sentence 1 UStG).

EÜR or double-entry books?

You may use the EÜR if you are not required by law to keep books and make regular financial statements, and do not do so (section 4 (3) sentence 1 EStG). Two routes lead to a duty to keep books:

Under other laws: whoever has to keep books under laws other than tax laws must also fulfil that duty for tax purposes (section 140 AO).
Under the tax limits: commercial businesses must keep books if, according to the tax office's findings, a business had total turnover of more than 800,000 euros in a calendar year or profit from a trade of more than 80,000 euros in a financial year (section 141 (1) AO). The duty begins with the financial year that follows the tax office's notice (section 141 (2) AO).

You send the EÜR electronically in the officially prescribed data format (section 60 (4) EStDV); how that looks in ELSTER is covered in filling in the EÜR and EÜR for small businesses.

How to keep your receipts in order

Your books must let a knowledgeable third party get an overview in reasonable time, and business transactions must be traceable (section 145 (1) AO). Entries are to be made individually, completely, correctly, in good time and in order (section 146 (1) sentence 1 AO). A record may not later be changed so that the original content can no longer be determined (section 146 (4) AO). Records can also consist of an orderly filing of receipts or be kept on data media, as long as that complies with the principles of proper bookkeeping (section 146 (5) AO).

As a time frame, the Federal Ministry of Finance's GoBD letter says that recording non-cash transactions within ten days is unobjectionable (margin number 47). In practice: collect, name and record a receipt before a pile builds up.

Invoices as a small business

Your invoices contain at least the information in section 34a UStDV, including a note that the small-business exemption applies to the service (section 19 UStG). The mandatory details are covered in writing an invoice as a small business. An advance VAT return does not apply to small businesses; the filing duties under section 18 (1) to (4) UStG do not apply, with section 149 (1) sentence 2 AO and section 18 (4a) UStG remaining unaffected (section 19 (1) sentence 2 UStG). More: VAT returns for small businesses.

Retention: even without a duty to keep books

Even those who calculate the surplus under section 4 (3) EStG have to keep the records and documents named in section 147 (1) AO (GoBD margin number 115). Businesses keep invoices and copies of invoices for eight years (section 14b (1) UStG); accounting vouchers eight years, books and records ten years (section 147 (3) AO). The periods with examples: receipt retention periods.

Common mistakes

Mixing up "small business" with "no bookkeeping needed". The small-business rule exempts you from VAT, not from calculating your profit.
Mixing business and private accounts. That makes it harder to trace business transactions (section 145 (1) AO).
Recording receipts late or not at all. In good time and in order is mandatory (section 146 (1) AO).
Assigning payments to the wrong year. In the EÜR the payment date counts (section 11 EStG).
Not watching the limits. If you move to standard VAT, your VAT bookkeeping changes too; see the small-business rule 2026.

How it works with VAT GPT

You upload your income and expense receipts as PDF, photo or XML file; you import Amazon and eBay sales from the CSV reports. For invoices the AI reads date, amounts, VAT, currency and country and assigns expenses to one of 29 categories. You check and confirm the result. From the income and expenses VAT GPT builds your EÜR, which you send with VAT GPT Pro via ELSTER. For your tax adviser there is a data export as a ZIP file with your receipts, overview tables and a DATEV bookings file.

After that it takes three steps:

Upload files: your Amazon or eBay CSV reports and your invoices. The AI reads amounts, countries and tax rates.
Check the result: VAT GPT breaks down the VAT for Germany and the EU (OSS) and prepares the advance return – monthly or quarterly. You check and confirm.
Send: with VAT GPT Pro via ELSTER directly to the tax office.

With Go you use all Pro features free of charge for 30 days. Get to know VAT GPT or create an account right away.

What VAT GPT does not do

VAT GPT is not tax advice.
VAT GPT does not offer double-entry bookkeeping with a balance sheet: it builds your EÜR and your tax returns.
VAT GPT does not decide for you whether you must keep books; the tax office tells you (section 141 (2) AO).
VAT GPT is not an archive that stores receipts according to the GoBD; GoBD and digital receipts explains that topic.

What does VAT GPT cost?

Free (basic features, free of charge), Go (30 days free with all Pro features), Pro €49 per month or €444 per year, each including VAT.

Frequently asked questions

Do I have to do bookkeeping as a small business? You have to record business income and expenses and keep the receipts. You only need a balance sheet if a duty to keep books exists (section 4 (3) EStG, sections 140, 141 AO).

Is a spreadsheet enough? Records may be kept on data media if that complies with the principles of proper bookkeeping (section 146 (5) AO). A template is shown in EÜR template for Excel.

When must I keep books? With total turnover above 800,000 euros or profit from a trade above 80,000 euros, once the tax office notes the start of the duty (section 141 AO).

Which year does a payment belong to? The year in which it is received or paid (section 11 EStG).

How long do I keep the documents? Invoices and accounting vouchers eight years, books and records ten years (section 14b UStG, section 147 (3) AO).