How to use online accounting when running a sole proprietorship?

Own company provides endless and flexible development opportunities. Today, the process of setting up its simplest form, a sole proprietorship, is easy, fast and does not require any capital investment. Nevertheless, there is something that worries the future entrepreneur - the obligation of accounting. How can a sole proprietorship fulfill it? Online accounting - this is the simplest answer! About her in our guide.

Sole proprietorship - online accounting or traditional accounting office?

Sole proprietorship is the basic and one of the most popular forms of running a business - the entrepreneur gains a lot of flexibility and does not have as many formal obligations as in the case of commercial law companies. And that is why JDG is provided with the possibility of running a simplified, so-called small accounting, independently or in the form of services of an accounting office, traditional or online. 

Online accounting, via the Internet, is so much more advantageous that all processes within it run more efficiently and faster – and most of them are automated. You do not leave the company or home to submit documents to the accounting office, you do everything electronically.

In practice, however, under the slogan "online accounting" there are two solutions. First they are this accounting services, but provided remotely, and secondly, independent bookkeeping with the help of dedicated programs available online. What are they about?

What is online accounting for a sole proprietorship?

In the first variant, you use the services online accounting offices, e.g. Open Profit. And your duties are limited to providing us with documents - naturally remotely, automatically from the level of the invoicing system that we provide to you. You have your own accountant assigned - the Account Manager - who takes care of all the company's accounting for you (depending on its form), i.e., for example, keeps revenue and expense ledgers, records of fixed assets or vehicle mileage records and VAT register, calculates the amount of indirect taxes (e.g. VAT, excise duty, customs duty), income tax advances, social security contributions and sends declarations on your behalf. 

The obligation to record sales and expenses is taken over by an external company. You only make transfers according to the schedule provided. It's an accounting office represents you in all contacts with offices and takes responsibility for any errors. If the accountant makes a mistake, you do not suffer any negative consequences.

What is online self-booking?

The second form of online accounting is independent accounting - you need to purchase an accounting program, usually in the form of access to an internet platform, application. 

You take on all accounting duties, but the program helps you with this – e.g. automatically after selecting the form of taxation and importing documents, it calculates taxes and social security contributions or generates the JPK_V7 control file. If you run a sole proprietorship with only this small accounting, you can use this solution, but it involves the risk of making a mistake or not taking care of formalities and changing regulations. And for a mistake in this case, you will be responsible with all your assets.

In what form is a small online bookkeeping for a sole proprietorship kept?

There are two forms of small bookkeeping for a sole proprietorship - they are is the revenue and expense ledger (KPiR) and the registered lump sum. There is also a third option: a tax card, but only for people who have already used this form of taxation before December 31, 2021 and meet several other conditions.

• Ledger. It is a form of accounting for those companies that choose the form of taxation on general terms or a flat tax. It consists of monthly records of sales (revenue) and expenses (disbursements) of the company. The expenses incurred are tax deductible costs and reduce the tax base: you pay less tax. You can include all business costs, e.g. purchase of a computer, internet, fuel.
• Registered lump sum. Accounting is kept in the form of records of revenues on which the entrepreneur pays tax. Depending on the type of activity, registered lump sum rates are set from 2 to 17%. This is not a favorable form of taxation for every activity, but it can pay off if you do not incur expenses related to running a business. However, you must remember about the income limits for this form of taxation.

The KPiR is not the only document you need to keep - next to the ledger, there is also a VAT register (if you become an active VAT payer), register of fixed assets and intangible assets or a vehicle mileage record.

An entrepreneur running a sole proprietorship can naturally also opt for full accounting, although it is not mandatory until a certain income limit is reached (in 2023 it is PLN 9,654,400 for 2022). Such accounting consists in keeping books of accounts that contain much more elements than revenues and expenses, because also statements of turnover and balances of the general ledger and auxiliary books, lists of assets and liabilities or financial statements. Gives you full insight into your company's finances. 

How does online accounting (JDG) work with Open Profit?

1. We help you set up a sole proprietorship. If you haven't registered your company yet, we'll help you through the entire process - including choosing the most favorable form of taxation. We also verify the need for VAT registration, advise on ZUS reliefs and help to register a company online, and then we check the correctness of the application.
2. You set up an account at Open Profit and grant us powers of attorney. Once you register your company, we sign a contract in the form of a subscription and send powers of attorney, which you complete and deliver to the tax office and the Social Insurance Institution (ZUS). You set up an account at Open Profit and gain access to a company account on the Dropbox platform, an invoicing program and an application for notifications about deadlines for social security contributions and tax transfers.
3. You meet your Supervisor, an individual accountant. You receive an e-mail from your Supervisor, in which he also provides you with all the information necessary at the start. One person takes care of all your company's accounting. And he is always at your disposal - he will advise you not only on accounting matters, but also on taxes or legal aspects of your business.
4. You can conveniently issue and send invoices in the program. We provide you with COMARCH ERP XT software, which allows you to issue invoices and automatically send them to our accounting office, as well as many other functionalities helpful in running a business. You can conveniently import all necessary documents to your Dropbox account. 
5. You receive information about the amount of taxes, advance payments and contributions. By e-mail or by phone, we provide you with the necessary data on the amount of VAT (and other taxes, e.g. customs, excise), advance income tax and social security contributions. Thanks to the application, you receive personalized notifications about transfer dates. You make transfers - and that's all your responsibilities!

What are the advantages and benefits of online accounting?

• Huge time saver and convenience. You don't waste time on contacting an accountant, preparing and sending paper documents, and on your own register of fixed assets, depreciation write-offs and VAT declarations or calculating taxes and contributions. You have specialists for this. Your role is to deliver invoices and documents and make transfers.
• Peace and a sense of security. You don't worry about forgetting something or missing any legal changes and consequently losing or making a costly mistake. The accountant takes full responsibility - he is responsible for mistakes, represents you in contacts with offices and participates in any inspections or proceedings.
• Tax and legal changes off the top of your head. An entrepreneur has enough issues and challenges on his mind - he does not need to know the law and follow changes that are usually hard to understand, and even harder to adapt procedures in the company to the new order. Keeping your own accounts requires this from you, but entrusting the accounting to a company - absolutely not.
• Support - not only in accounting. Years of experience in accounting for various entities give Open Profit specialists enormous and multifaceted knowledge that they willingly share with their clients. If you decide to cooperate with a company like ours, you will gain someone more than an accountant - you will gain a reliable partner who will help you develop your company.

Not only online accounting - what else can an e-accounting office help with?

Online accounting for a sole proprietorship can turn into comprehensive administrative support for your company – in Open Profit you will still entrust us with all HR and payroll services, calculation of salaries, keeping employees' personal files, preparing contracts and employment certificates, preparing payrolls and sending PIT and ZUS declarations. Your responsibilities in this regard will come down to accepting salary transfers. What else? You will have at your disposal specialists in tax and legal matters who will give opinions on signed contracts, advise on the choice of the form of employment or recover receivables from clients and contractors. 

FAQ:

1. What is online accounting (sole proprietorship)?

Online accounting is based on remote cooperation with the accounting office. You deliver all documents conveniently via the program or by e-mail, and you receive information about the amount of taxes, advance payments and contributions from the accountant. The accounting office provides declarations to the tax office and the Social Insurance Institution (ZUS).

2. What are the benefits of online accounting for a sole proprietorship?

Online accounting is a combination of comfort and time savings with a sense of complete security. Your duties are limited to a minimum (delivery of invoices and making transfers), you contact the accounting office only remotely, but the accountants take all responsibility and represent you in contacts with offices.

3. How much does online accounting (JDG) cost?

Much depends on the scope of services and work (e.g. the average monthly number of documents to be booked), while online accounting costs less than the services of a traditional accounting office. It is also a symbolic cost compared to employing specialists in the company. On average, you pay from PLN 150 to several hundred for the service.