Keeping records
gives insight into the financial position of your business.
You can take care
of your own business administration, but you can also outsource it.
In this video, I will take you through what you need
to know and arrange for your records, step by step.
Let's start with step one: Know the requirements.
You are legally obliged to keep records of your business in your administration.
This is because you have to be able to prove to the Tax Administration
that the income you file in your VAT and income tax returns is correct.
Examples are bank statements, receipts and contracts.
You must keep these records on paper or digitally.
Onto step two: Keep your records.
You are obliged to keep your records for at least seven years,
and you need to hold on to some information for even longer.
This is called the retention period.
You can arrange this and how you will keep your records
with the Netherlands Tax Administration.
The records you must keep for
at least seven years are credit and debit accounts,
purchase and sales records,
the general ledger, stock records and cash accounts.
Some data, such as information
about real estate, must be kept for ten years.
Also consider privacy regulations such as the GDPR.
For example, you may not keep the personal data
of your customers for any longer than necessary.
If you want to keep the data longer than the mandatory retention
period of seven or ten years, you must have a good reason for doing so.
Is the data no longer necessary?
Then you must destroy the data or make it anonymous.
On to step three: Be aware of the hours criterion.
Keeping a record of your hours is not mandatory.
But, if you want to qualify for tax benefits, you need to prove
to the Tax Administration that you meet the hours criterion.
Then you may make use of the private business
ownership allowance and the tax relief for new companies
for example.
You meet the hours criterion,
if you spend at least 1225 hours per calendar year on your business.
Be aware that this number also applies if you start or end your business
in the middle of a year. And if you are a part-time entrepreneur.
You also need to spend
more time on your business than on other work to qualify.
That is, unless you were not active as an entrepreneur
in one of the last five years, then this condition does not apply.
Then we go to step four.
Decide if you will do your own administration or outsource it.
You can take care of your own business administration,
but you can also outsource it to an accountant or bookkeeper.
Note that some businesses are obliged
to have their administration checked by an accountant.
This depends on, among other things, your turnover
and the number of employees.
Entrepreneurs who do not meet
these conditions can also choose to use an administrative office.
There are two types of administrative office.
There are offices that are members of a sector organisation
and have mandatory liability insurance, meet training requirements,
follow compulsory retraining, and have terms of delivery and payment.
And they help entrepreneurs with their business administration and give advice.
Then there are the offices that are not members of a trade association.
They are not required to take out liability insurance
and can decide for themselves whether they only help
with business administration or also give advice.
Follow these steps and you will have proper business records
that you maintain according to the rules.
Want to know more then go to Business.gov.nl.