As a founder and entrepreneur, you have many obligations - among other things, you must prepare an opening balance sheet immediately after founding your company and every year at the beginning of the new financial year. However, large amounts of data, which are available especially in companies and groups with worldwide subsidiaries, make precise and quick accounting difficult.
The solutions from SAP can help here. With the help of SAP for Group Reporting, you can consolidate your data for your annual and consolidated financial statements as well as for your opening balance sheet.
Creating an opening balance sheet – what is an opening balance sheet?
According to Section 242 of the German Commercial Code (HGB), all companies and merchants who are required to keep double-entry books must create an opening balance sheet.
This forms the basis for your accounting, in which you record all your business transactions. It is an important proof for the tax office.
In the opening balance sheet, you document all the assets of your company. You can use this to compare debts and assets with previous years. This way you can see which funds are available to you in the coming year.
Who is required to prepare an opening balance sheet?
The following legal forms are subject to accounting and must prepare an opening balance sheet:
- Registered merchants – e. K
- Partnerships – OHG, KG, GmbH & KG
- Corporations – GmbH, UG (limited liability), AG
Persons who, on the other hand, are freelance or run a small business are not obliged to prepare a balance sheet. It is sufficient to create an income surplus calculation (EÜR) at the end of the year as part of the tax return.
When do you need to prepare an opening balance sheet?
You must create an opening balance sheet:
- when you start your business (called the start-up balance sheet)
- at the beginning of each financial year
The key date for preparing an opening balance sheet is the start of your business activity. You should have drawn up your balance sheet at the latest when you enter your company in the commercial register.
However, it is up to you when you submit this to the tax office. There is no statutory deadline for submission. However, it is usual for medium-sized and large companies to submit their balance sheet around three months after founding, entrepreneurial companies and small limited liability companies after just under six months.
The accounting is also pending
- if you change the legal form of your company (conversion balance sheet), for example from a partnership to a GmbH
- if your company merges with another (merger balance sheet)
If one of these cases applies to you, you should prepare the balance sheet immediately.
Create opening balance – assets, liabilities and opening balance account
If you want to create an opening balance sheet, you must list all of your company's assets and liabilities and compare them using an opening balance sheet account (EKB). In this case, the EKB serves as an auxiliary account. Here you record all opening balances and posting records.
Assets
The assets include your use of funds, broken down into current assets and fixed assets.
Fixed assets include all items that you use in your company:
- machines for production
- computers and other office items
- your fleet
Current assets include all goods that you consume and process and that you need for short-term sale:
- Raw materials
- Petrol
- Office supplies such as paper, envelopes, printer cartridges, etc.
Passive
Enter the source of funds on the liabilities side:
- Equity including all deposits and income
- Provisions that are highly likely to be incurred
- Borrowed capital (liabilities)
- Formation costs, provided these are recorded in the articles of association
What do you have to consider when preparing an opening balance sheet?
When preparing an opening balance sheet, keep the following factors in mind.
Costs
A tax consultant will support you in preparing your opening balance sheet, which will then be certified by a notary. Both services incur corresponding costs, which depend on your starting capital.
Mandatory information
In addition to assets and liabilities, your opening, incorporation, merger or transformation balance sheet should also include the following information:
- Company Name
- Place
- date of incorporation
- Name and signature of all directors
Balance sheet identity/balance sheet continuity/balance sheet relationship
Another point to consider is balance sheet identity, balance sheet continuity, or balance sheet cohesion. According to the balance sheet identity, the closing balance of the previous year must match the opening balance of the current financial year.
The closing balance sheet shows all financial changes during the financial year and is an important part of your annual financial statements, along with the profit and loss account. With the opening balance you also check your closing balance.
Create opening balance with SAP
The software solutions from SAP enable you to create your opening balance in full. For example, you can use SAP S/4HANA for Group Reporting to consolidate your plan and actual data in real time, both before and after completion. In this way you optimize your accounting and financial planning in the long term. The tool offers the following advantages:
- direct access to your data
- Integration of non-SAP data
- intercompany accounting
- capital consolidation
- data validation
- Currency conversion
- Intercompany reconciliation with drill down capability
- manual postings of corporate documents
- Reporting
Create an opening balance sheet with SAP – INSIRE advises
It is mandatory for companies to prepare an opening balance sheet. As part of this, you will receive an overview of all expenses and income and see what funds are available to you in the respective financial year. However, creating the opening balance sheet can be a challenge when dealing with large amounts of data.
SAP is a powerful solution here. The software supports you with various functions for accounting, profit and loss accounts, period comparisons and budget reports.
As an experienced partner, we help you to carry out your accounting correctly. Our offer ranges from workshops and preliminary studies to the implementation of the optimal SAP solution, such as SAP S/4HANA for Group Reporting. Contact us!