Accounting and bookkeeping: a complete guide for businesses
Accounting and bookkeeping are the foundation of any company’s financial management. These essential activities enable you to track financial flows, comply with tax obligations and make informed decisions. In today’s complex regulatory environment, mastering these aspects is crucial to the sustainability of your business and your compliance with corporate tax regulations.
What is accounting and bookkeeping?
Accounting is a financial information system that records, classifies and summarizes a company’s economic operations. In concrete terms, it enables real-time monitoring of sales, purchases, salaries and investments. This global vision helps managers to measure the profitability of their products, evaluate their financing capacity and produce reliable financial statements for their partners. To find out more about this fundamental concept, consult our detailed guide to accounting.
Bookkeeping is the operational aspect of accounting. It consists of recording all business transactions chronologically in the mandatory accounting books. This daily activity guarantees the traceability of operations and the production of accurate financial information. According to industry studies, some 60% of SMEs outsource this function, while VSEs devote an average of 3 to 5 hours a week to it.
The application of these principles varies considerably according to the size of the company. Micro-businesses may be content with simplified accounting, while commercial companies must comply with more stringent obligations, with full accrual accounting. Large companies, on the other hand, set up sophisticated accounting systems with reinforced internal controls.
The main objectives and their concrete benefits are :
- Record all financial transactions: ensure complete traceability and facilitate controls
- Produce periodic financial statements: to manage business and communicate with partners
- Comply with legal and tax obligations: avoid penalties and optimize your tax burden
- Provide information for decision-making: help identify profitable products and areas for improvement
- Facilitate management control: compare results with objectives and adjust strategy
Legal accounting requirements
The French Commercial Code imposes strict accounting obligations on all commercial enterprises. These obligations are determined by precise sales thresholds: micro-enterprises (sales < €176,200 for commerce or < €72,600 for services) benefit from simplified obligations, while companies exceeding these thresholds must comply with full commitment accounting.
Obligations differ according to the size of the company:
- Micro-businesses: Keeping a book of receipts and a register of purchases
- VSEs and SMEs: Complete accounting with all required books
- Large companies: more stringent obligations, including statutory auditors
All companies are required to :
- Keep regular and accurate accounts
- Record asset movements chronologically
- Verify the existence and value of assets and liabilities by means of inventories
- Draw up annual accounts at the end of each financial year
- Keep accounting records for 10 years
Failure to comply with these obligations is subject to specific penalties: the tax fine for failure to keep accounts ranges from €1,500 to €15,000, with an average of €4,500 applied by the tax authorities. If accounting records are rejected during a tax audit, companies are subject to a surcharge of between 40% and 80% of the duties due, representing an average of €25,000 in additional penalties for an SME.
The different types of company accounting
Companies can set up different types of accounting systems depending on their needs, size and sector of activity. Each type meets specific objectives and complements the others to provide an overall view of performance. According to industry studies, around 65% of SMEs use only general accounting, while 35% of companies with over 50 employees also integrate cost accounting into their management.
General accounting is the mandatory basis for all companies. It records all operations in compliance with accounting principles, and produces the legal financial statements: balance sheet, income statement and notes. This type of accounting is particularly well-suited to small businesses and craftsmen, who need to meet their legal obligations without the need for in-depth analysis. Software packages such as Sage, Ciel or QuickBooks make day-to-day bookkeeping easier by automating recurring entries.
Cost accounting enables you to analyze costs by product, service or responsibility center. It is indispensable in the manufacturing, catering and service industries, where the profitability of each activity must be calculated. For example, a restaurant may determine that its main courses generate a margin of 68%, while its desserts achieve only 45%, enabling it to adjust prices or portions. On average, companies using well-structured cost accounting see a 12% improvement in profitability, thanks to better resource allocation and sales price optimization based on actual costs.
Budgetary accounting compares actual figures with budget forecasts, and facilitates management by identifying significant variances. It is particularly useful in highly seasonal sectors such as tourism or retail, where companies need to anticipate variations in activity. A clothing store, for example, can forecast its stock purchases by comparing actual sales with forecast budgets by period. Business intelligence tools such as Tableau or Power BI enable these discrepancies to be visualized in real time, enabling sales strategy to be adjusted rapidly.
Mandatory bookkeeping
By law, several accounting books must be kept to ensure traceability of operations. These documents constitute the company’s accounting memory and serve as a basis for audits.
The journal records all operations chronologically. Each entry must be dated, numbered and supported by an accounting document.
The general ledger groups all entries by account. It enables you to follow the evolution of each balance sheet and income statement item.
The trial balance summarizes the balances of all accounts at a given date. It is an essential control tool for verifying the balance of accounts.
For some companies, a declaration of confidentiality for annual accounts may be necessary, depending on their size and status.
The importance of professional accounting services
Faced with the growing complexity of accounting and tax rules, many companies are turning to professional accounting services. This outsourcing generates substantial savings: a very small company can outsource its accounting for €1,500 to €3,000 a year, compared with €35,000 to €45,000 for a full-time salaried accountant. In addition to cost savings, it guarantees up-to-date expertise and enhanced legal security.
The chartered accountant assists the company in its day-to-day accounting management. He verifies the regularity of entries, draws up the annual accounts and advises on tax and social security aspects. Fees vary according to company size: €150 to €300 per month for a micro-business, €300 to €800 for an SME, and €1,000 to €3,000 for an intermediate-sized company.
Statutory audit is compulsory for companies exceeding two of the following three thresholds: sales of 4 million euros, balance sheet total of 2 million euros, or 50 employees. This control mission guarantees the fairness and regularity of the accounts.
Fiduciary accountants offer an interesting alternative, particularly for SMEs wishing to outsource their accounting while retaining control over their management. Their rates are generally 20% to 30% lower than those of chartered accountants.
Criteria for selecting a professional accountant include :
- Sector specialization and knowledge of your business
- Geographical proximity to facilitate exchanges
- Technological tools (dematerialization, collaborative software)
- Transparent pricing and no hidden charges
- Customer references and professional reputation
Auditing your accounts helps to ensure the quality of your financial information, and to detect any anomalies prior to external audits. This service, invoiced at between €2,000 and €8,000, represents a cost-effective investment in secure accounting management.
Risks and penalties in the event of default
Failure to comply with accounting obligations exposes the company to significant legal and financial risks. The tax authorities have extensive means at their disposal for checking accounting compliance.
During a tax audit, the tax authorities take a close look at the company’s accounting records. Faulty bookkeeping can lead to rejection of the accounts and automatic taxation.
Sanctions can include tax fines, late payment penalties and, in serious cases, criminal prosecution. Corporate tax audits follow a precise procedure that managers need to be aware of in order to defend their interests.
The main penalties are :
- Tax fine of €1,500 to €15,000 for failure to keep accounts
- 40% to 80% increase in duty due in cases of bad faith
- Penalties of up to 5 years’ imprisonment
- Personal liability of directors in the event of mismanagement
Optimizing accounting management for the future
Well-kept accounts are a strategic asset for any company. It facilitates access to financing, enhances credibility with partners and enables more efficient management of resources. According to the latest studies, 78% of French companies have begun their digital accounting transformation, generating on average 25% savings on their management costs.
Digitization is revolutionizing accounting practices: automatic recognition of invoices by OCR, automated bank reconciliations, instant generation of tax returns and real-time dashboards. These innovations reduce data entry errors by 90%, freeing up time for strategic analysis.
Software selection according to company size :
- Very small businesses (1-10 employees) : Sage 50, Ciel Compta, QuickBooks Simple Start
- SMEs (10-250 employees) : Sage 100, EBP Compta Pro, Zoho Books
- Large enterprises: SAP, Oracle NetSuite, Microsoft Dynamics 365
Key steps in digitizing your accounting :
- Audit current processes and identify bottlenecks
- Selecting the right software for your needs and budget
- Historical data migration with integrity check
- Training teams in new tools
- Setting up automation and controls
- Continuous optimization based on performance indicators
Key indicators for optimizing management :
- Average invoice processing time (target: less than 3 days)
- Rate of automation of accounting entries (target: 80%)
- Processing cost per accounting entry
- Monthly closing time (target: 5 business days)
- Data entry error rate (target: less than 1%)
For companies wishing to optimize their organization, support from professionals specialized in tax and accounting law is becoming essential. This expertise makes it possible to navigate regulatory complexity while securing accounting practices and maximizing the benefits of digital transformation.
Frequently asked questions
Discover the answers to the most frequently asked questions about accounting and bookkeeping for businesses, from a legal and tax perspective.
What is accounting and bookkeeping for businesses?
Accounting and bookkeeping is the process of recording, classifying and summarizing a company’s financial operations. This discipline makes it possible to track financial flows, draw up mandatory accounting documents and comply with legal obligations. It includes inputting entries, keeping accounting records, drawing up balance sheets and income statements, and preparing tax returns.
How do you set up an efficient accounting and bookkeeping system?
Setting up an efficient accounting system requires several key steps: defining a chart of accounts suited to your business, choosing high-performance accounting software, establishing rigorous data entry procedures, and setting up an internal control system. It is essential to train the staff concerned and define a calendar of accounting and tax deadlines to ensure optimal management.
What are the best accounting and bookkeeping practices?
Best practices include regular bookkeeping, segregation of duties, methodical archiving of supporting documents, and monthly bank reconciliations. Periodic checks, regular data back-ups and clear documentation of procedures are recommended. Collaboration with a chartered accountant and a tax consultant guarantees compliance with legal obligations.
What tools are recommended for accounting and bookkeeping?
Modern tools include cloud accounting software (Sage, Ciel, QuickBooks), invoice dematerialization solutions, expense management platforms, and automated bank reconciliation tools. Integration with invoicing and sales management systems optimizes efficiency. The choice should take into account company size, business sector and specific reporting requirements.
What are the current accounting and bookkeeping regulations?
Companies must comply with the French General Chart of Accounts (Plan Comptable Général – PCG), IFRS standards for certain companies, and the requirements of the French Commercial Code. Key requirements include keeping mandatory accounting records, retaining documents for 10 years, drawing up annual financial statements, and complying with filing deadlines. Managing VAT territoriality and tax domiciliation are also important issues. The penalties for non-compliance can be severe, which is why rigorous monitoring is so important.
How do accounting and bookkeeping impact tax optimization?
Good bookkeeping is essential for tax optimization, as it enables you to identify opportunities for deductions, tax credits and advantageous tax regimes. It facilitates precise calculation of taxable bases, management of depreciation, and anticipation of tax deadlines. For self-employed professionals, declaring profits requires particular attention. Accounting for and optimizing social security contributions is also a major challenge. Close collaboration between accountants and tax consultants helps maximize tax benefits while complying with current legislation.