Bookkeeping for the self-employed in Germany: what you really have to do

What kind of bookkeeping do I need as a self-employed person?

German tax law has two ways of determining profit: the cash-basis profit statement (Einnahmenüberschussrechnung, EÜR) under § 4 Abs. 3 EStG and the comparison of business assets with double-entry bookkeeping, balance sheet and profit and loss account. Which applies to you depends on legal form and size – not on what your bank advisor or an acquaintance does.

Freelancers (§ 18 EStG) may always use the EÜR, however high their revenue and profit. Trade businesses may too, as long as they are not required to keep books as a merchant (Kaufmann) under the HGB and the tax office does not require it under § 141 AO. Since 2024 the thresholds are €800,000 revenue or €80,000 profit in the financial year. A GmbH or UG, on the other hand, is always a merchant by virtue of its legal form and must prepare a balance sheet.

More about the form in the guide on the cash-basis profit statement (EÜR). If you are just starting out, read becoming self-employed in Germany first.

What you have to record – and what you do not

The EÜR is not an estimate either. The tax office (Finanzamt) expects every figure in the Anlage EÜR to go back to a receipt. Mandatory are:

• All business income: outgoing invoices, cash sales, interest on the business account, insurance refunds, grants.
• All business expenses with receipts: incoming invoices, till receipts, bank statements for fees, self-made receipts (Eigenbelege) where there is no receipt.
• VAT separately: VAT collected and input VAT paid, each by tax rate (see VAT for the self-employed).
• Purchases over €800 net in the fixed asset register with depreciation (see depreciation (AfA) and low-value assets (GWG)).
• Entertainment and gifts individually and separately from other expenses (§ 4 Abs. 7 EStG).
• Private shares, for example for the phone or car, and private withdrawals and contributions – to be stated in the Anlage EÜR if business interest on debt exceeds €2,050.

The basic GoBD rules, one sentence per rule

The GoBD (principles for the proper keeping and retention of books, records and documents in electronic form) also apply to sole traders using the EÜR. In everyday terms this means:

• Complete: every business transaction is recorded, even the €3.80 coffee.
• Correct and traceable: every entry leads to the receipt and back.
• Timely: record cash transactions daily, non-cash ones promptly; recording within ten days is considered safe.
• Unalterable: corrections only by reversal entry or new version, never by overwriting – which is why an Excel list alone is not GoBD-proof.
• Retention: accounting vouchers eight years, books and EÜR ten years, business letters six years – details in the guide GoBD and retention periods.

Your monthly routine: bookkeeping in 60–90 minutes

Most problems arise when receipts sit in a shoebox for a year. Plan a fixed date, for example the first working day of the month – with a monthly VAT return (Umsatzsteuer-Voranmeldung) by the 10th at the latest.

At year end a few steps are added: calculate depreciation for the fixed asset register, assign regularly recurring payments around the turn of the year according to the ten-day rule (such as the December VAT prepayment paid by 10 January), book private shares for car and phone and prepare the Anlage EÜR and the annual VAT return. If you have booked cleanly during the year, this takes hours rather than days.

• Collect receipts: email inbox, customer portals, photos of till receipts, e-invoices (XML) – everything into one inbox.
• Record expenses: supplier, date, net amount, tax rate, category, private share if needed.
• Check outgoing invoices: have all the month’s services been billed? Numbers without gaps?
• Reconcile the bank statement: every transaction belongs to an invoice, an expense, a private withdrawal or a transfer.
• Check open items and, if necessary, send a friendly reminder.
• Count the cash if you have cash in the business (see cash book (Kassenbuch)).
• Send the VAT return or note the quarter, and set aside a reserve for income tax (tax reserves).

Filing receipts: digital, but organised

You may scan or photograph paper receipts and then destroy the paper (substitute scanning, ersetzendes Scannen) if the image is legible and complete and you describe how you go about it. Digital receipts – PDF invoices, e-invoices, online orders – are kept in their original format; a printout is not enough.

A proven system is filing by year and month with a unique receipt number that also appears in the entry. If you use bookkeeping software, attach the receipt directly to the entry; then there is no searching when the tax office asks questions. If a receipt is missing, write a self-made receipt (Eigenbeleg) with date, amount, recipient, purpose and the reason why there is no receipt – but you cannot claim input VAT from it.

Bank reconciliation: the most important check

Reconciling bank statement and bookkeeping immediately shows you what is missing: an unrecorded expense, an unpaid invoice or a payment booked twice. This is easiest with a separate business bank account used only for business payments.

Typical assignments during reconciliation are: incoming payment to the outgoing invoice, direct debit to the incoming invoice, account fee as a cost of money transactions, transfer to your private account as a private withdrawal, payment to the tax office as a VAT prepayment or – for income tax – also as a private withdrawal, because income tax is not a business expense.

Tip for reconciliation: if the balance in your books at month end matches the account balance on the statement, the month is complete. If it differs, almost always a bank statement, an unbooked fee or a payment that settles two invoices at once is missing.

Example: one month of bookkeeping with figures

Lena is a freelance UX designer, charges VAT and files quarterly VAT returns. In March 2026 her month looks like this:

Excel, software or a tax advisor?

Legally you may do your bookkeeping yourself. The question is how much time, risk and money you want to invest. Important: since the EÜR, the VAT return and the trade tax return can only be filed electronically via ELSTER, you need a digital tool anyway.

The most common bookkeeping mistakes

Tax auditors see these mistakes with the self-employed again and again – all of them can be avoided with the monthly routine:

• Private and business payments mixed, without receipts for private withdrawals.
• Accepting invoices without the mandatory details – then the input VAT deduction is lost (see writing invoices).
• Entertainment receipts without occasion and participants (see entertainment expenses (Bewirtungskosten)).
• Expensive purchases deducted in full immediately instead of spread over their useful life.
• Income tax or health insurance booked as a business expense.
• VAT refunds from the tax office forgotten – in the EÜR they are business income.
• E-invoices kept only as a PDF printout instead of the original XML (see e-invoicing).

Bookkeeping with Kontelio

Kontelio connects the steps of the monthly routine: you write invoices with sequential numbers, upload or photograph receipts into the receipt inbox and record them as expenses with category, tax rate and private share. From the Business plan, Kontelio books according to SKR03, imports bank statements as CAMT, MT940 or CSV and suggests the matching invoice or expense during reconciliation. This produces the VAT return and the Anlage EÜR, which you send directly to ELSTER; receipts are archived for ten years in line with the GoBD. On the Business and Pro plans you give your tax advisor free access. An overview is on the page bookkeeping software for the self-employed.

Frequently asked questions