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Bookkeeping obligations and accounting documentation

All companies must maintain accurate bookkeeping. The management of the company is responsible for arranging the bookkeeping. In most cases, the entrepreneur is most likely to concentrate on developing own business and prefer to provide an accounting issue to the bookkeeping firm (tilitoimisto). It is better to listen experts when preparing annual financial statements (tilinpäätös). It's often a good idea to consult with a professional auditor (tilintarkastaja) in particular when issue concerns partnerships or limited liability companies. However, the planning, monitoring and development of the actual business is always the responsibility of the entrepreneur.

Accounting requirements depend on the size of the company. Depending on the size, the enterprises can be classified in different categories: micro-, small- , medium- and large-sized enterprises (Accounting Act of 30.12.1997 / 1336, Chapter 1). Company refers to a reporting entity if at the balance sheet date of the previous financial year and the one immediately preceding it:

  • one of the following three criterions was exceeded for micro- or small companies
  • at least two of the following three criterions were exceeded for large companies

Micro-sized enterprise

  1. total assets 350 000 euros
  2. net turnover 700 000 euros
  3. average number of employees during the financial year 10

Small-sized enterprise

  1. total assets 6 000 000 euros
  2. net turnover 12 000 000 euros
  3. average number of employees during the financial year 50

Large-sized enterprise

  1. total assets 20 000 000 euros
  2. net turnover 40 000 000 euros
  3. average number of employees during the financial year 250

There are also medium-sized enterprises when:

  1. at least two of three criterions were exceeded for small companies
  2. and on the other hand, turnover, balance sheet or number of employees were not exceeded at all or just one of three criterions were exceeded for large companies

Private traders (toiminimi) and self-employed persons (ammatinharjoittaja) are not obliged to apply double-entry bookkeeping if maximum one of the following three criterions was exceeded in previous financial year and the one immediately preceding it:

  1. total assets in excess of 100 000 euros
  2. turnover in excess of 200 000 euros
  3. average personnel amounting to more than 3 (three)

Accounting Act of 30.12.1997 / 1336 in English and in Finnish .

The business operations start

Obligation to keep records, i.e. the first accounting entries and the beginning of the first financial year.

The first financial year of the private business (private traders / business operators, toiminimi) and the accounting obligation begins from the date when the business or professional activity is actually carried out.

The signing of the establishment agreement of a partnership (avoin yhtiö AY - general partnership, kommandiittiyhtiö KY - limited partnership) have no significance for the beginning of the accounting obligation if the business activity actually has already been started before the date of signature. The accounting obligation begins when the business operations actually have started.

In a limited liability company (Osakeyhtiö или OY), the first financial year begins at the latest from the date of subscription for the shares of the company being formed and in co-operative (Osuuskunta или OSK) from the date of the foundation agreement. However, if there were some actions before company establishment (pre-incorporation transactions) the transactions describing these activities must be recorded into bookkeeping in any case at the time of their occurrence (all financial activity is occurring in а “real time”), then the beginning of the first fiscal year of the company will be calculated from the first transaction. This applies to a limited liability company and the cooperative.

The association's (Yhdistys) first financial year begins on the date of the foundation agreement signing.

The foundation's (Säätiö) first financial year begins on the date of registration of the foundation.

Taloushallintoliitto (in Finnish)

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