Do I Have to Keep Preliminary Accounting? Who Needs It?

Let's answer the question directly: there is no provision in the legislation stating that "you must keep basic accounting records."

But this doesn't mean you can skip it. Because mandatory duties — issuing documents, keeping ledgers, filing tax returns — cannot be done without basic accounting. The law dictates the outcome, not the method.

What is legally mandatory?

While it varies depending on your type of entity, these three apply to almost every business:

• Issuing documents. You must issue an invoice, self-employment receipt, or relevant document for your sales.
• Keeping ledgers. Which ledger to keep depends on your entity type; your financial advisor determines this.
• Retaining documents. You must keep the documents you issue and receive for the statutory retention period.

Basic accounting is not the name of any of these three. Rather, it is the name of the record-keeping system that feeds all three. If you don't keep your invoices in order, your ledger will be incomplete; if your documents are disorganized, you cannot fulfill your retention obligation.

The situation by business type

Sole proprietorship

In most sole proprietorships, the ledger workload is relatively light and managed by the advisor. Despite this, this is usually the group that needs basic accounting the most — because the person doing the work, making the sale, and collecting the payment is the same. There is no second person to remind you to follow up on receivables.

Limited liability and joint-stock companies

The ledger obligation is heavier, and the quality of data sent to the advisor directly reflects on costs. Disorganized document delivery means more hours spent by the advisor and more corrections at the end of the period.

Self-employed professionals

Receipt workflows and collection tracking stand out. If you work on a project basis, tracking which job was collected when is the only way to manage income fluctuations. The article Income and Expense Tracking for Freelancers focuses on this scenario.

E-commerce businesses

Things get serious here. When marketplace commissions, returns, shipping, and different payment channels come together, manual tracking becomes practically impossible. We gathered the most costly ones in the article Common Mistakes in E-Commerce Accounting.

Where does "My advisor handles it" fall short?

This statement is very common and partially true. Your advisor files your tax return, keeps your ledgers, and manages official processes.

What they don't do is tell you whose payment is overdue today. Because an advisor works with past periods; you work with today. A January financial statement arriving in March won't save a decision that needed to be made in January.

The two are not rivals. Your advisor ensures compliance; basic accounting ensures control.

At what point is it no longer delayable?

For a newly established business issuing a few invoices a month, ledgers and folders suffice for a while. Once any of these thresholds are crossed, the cost of delaying increases rapidly:

• When you start selling on credit terms. Current account tracking is simple when working on a cash basis; the moment credit terms enter the picture, receivables management becomes a distinct job.
• When you become an e-Invoice taxpayer. Documents are now generated electronically; moving the process to software becomes mandatory.
• When you start keeping inventory. Managing stock quantities by guesswork quickly turns into a loss.
• When a second person joins the business. If records are only in your head, no one else on the team can access them.

Where to start?

Three things are enough for the first week: your current cash and bank balances, your open receivables and payables, and the current accounts you work with regularly. The rest builds up as you operate.

If you are unfamiliar with the terms, start with our guide prepared for non-accountants; it explains basic terms in plain language.

Frequently asked questions

Will I get penalized if I don't keep basic accounting records?

Penalties are not issued directly for "not keeping basic accounting." Penalties arise from situations like failing to issue documents or neglecting ledger-declaration obligations. Basic accounting is the system that prevents these.

We just launched, no sales yet. Is it still necessary?

Starting to record your startup expenses right away is the easiest path; catching up later is much harder.

Which ledger should I keep for my own business?

This is determined by your entity type and falls under the expertise of your financial advisor. It wouldn't be right to give a blanket answer.

Isn't Excel enough?

It might be sufficient at low volumes. We covered its limits and the transition process in our article on moving away from Excel.

In short: basic accounting is not a legal obligation, but the way to fulfill legal obligations. And its real benefit isn't just in compliance, but in being able to run your own business effectively.

By opening a free account on Qolay.App, you can set up your record-keeping system today.

This article is for general informational purposes only and does not constitute legal or financial advice. Consult your financial advisor for your specific obligations.