Accounting for a UG: How to Master Double-Entry Bookkeeping
Many founders opt for the legal form of an entrepreneurial company (UG). This “mini-GmbH” can be founded with low start-up capital and is considered a comparatively uncomplicated start into self-employment.
Nevertheless, as a corporation, it has clear obligations — particularly in the area of accounting. Which legal requirements apply? How does double-entry bookkeeping work? And is it worthwhile to take over the UG accounting yourself or outsource it to a tax consultancy?
The following sections give you a practical overview of everything you need to know about accounting for your UG.
The key points
Statutory requirements
A UG is a corporation and is therefore obliged to keep double bookkeeping.
Complex processes
The accounting of a UG is sometimes much more complex than for freelancers.
Modern software solutions
When choosing accounting software, you should make sure that it offers all important functions for your UG.
Cost vs. time
Doing the bookkeeping yourself seems cheaper at first, but it also ties up your capacities.
Cooperation with the tax advisor
If you want to save costs and benefit from expertise, you can prepare your accounting and let a tax advisor do the rest.
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Why bookkeeping is important for a UG
Accounting is the foundation of your UG. It creates transparency about the financial situation, supports business decisions and protects you from tax and legal risks.
As a corporation, UG — just like the GmbH — is obliged to keep proper bookkeeping and to prepare regular balance sheets. If these obligations are neglected, there is a risk of fines or even liability consequences.
However, well-organized bookkeeping is much more than just a legal obligation. It shows you how your company is developing and helps you make well-founded decisions based on current figures. Only those who keep an eye on income, expenditure and liquidity can react early to bottlenecks and plan investments in a targeted manner.
Transparent bookkeeping also builds trust vis-à-vis banks and investors. It signals that your company is professionally managed and has a solid financial basis. Therefore, use your UG's accounting not only to comply with legal requirements, but also as an important management tool for sustainable success.
Double-entry bookkeeping: What exactly does that mean?
Dual bookkeeping is the central principle of bookkeeping. It ensures that all financial transactions of your company are recorded seamlessly and comprehensibly.
The basic principle is simple: Each transaction is booked twice — once on debit and once on credit. This creates a complete picture of all cash flows. A simple example: If you sell goods on account, the amount is entered in the possession of the revenue account and in the debit of the receivables account. In this way, it is always possible to understand where income comes from and where expenditure flows.
Double bookkeeping is required by law for UGs — regardless of turnover or company size. It forms the basis for the balance sheet and the profit and loss statement (P&L), which are prepared at the end of a financial year and published in the electronic Federal Gazette.
To help you better understand the structure, here is an overview of the most important components:
Opening balance
It is created at the start of business activity and shows the starting capital and the initial values of all assets. The legal minimum share capital of a UG is 1 euro.
Chart of accounts
The chart of accounts or chart of accounts systematically depicts all business transactions — from income and expenditure to liabilities and receivables.
Journal
In the journal, all bookings are recorded in chronological order. It is therefore the “diary” of your accounting department.
ledger
The general ledger summarizes all transactions from the journal thematically and assigns them to the respective accounts.
Inventory and financial statements
An inventory is carried out at the end of the financial year. It forms the basis for the balance sheet and income statement, which show how your company has developed financially.
What is integral?
Integral unites Tax advice, bookkeeping and payroll in a holistic service.
Through intelligent automation, personal support and seamless integration of your existing tools, Integral ensures that your company remains tax-compliant at all times.
Experience how modern tax advice can work — with a free initial consultation or a guided tour of our platform.
Do it yourself vs. outsource UG bookkeeping: Overview of advantages and disadvantages
Since double bookkeeping is required for UGs, the processes are somewhat more complex. This means that if you take care of your bookkeeping yourself, you will probably have to invest a lot of time, especially at the beginning — time that you could otherwise invest in your core business.
Whether you the Outsource your UG accounting, also depends on your professional know-how, your security needs and your fundamental interest in accounting topics.
Both the decision to take over the bookkeeping yourself and outsourcing have advantages and disadvantages. The following table shows you which aspects you should consider.
Option
Benefits
Drawbacks
Do your own bookkeeping
- Comparatively low running costs
- Full control over business figures without having to first request evaluations from the tax advisor
- Development of background knowledge on taxes
- A lot of time spent
- Risk of mistakes being made or deadlines missed
- Not a specialist contact who can help with more complex topics, for example
Outsource consulting
- Full focus on core business
- Correct and legally secure bookings
- Possibility to ask questions
- Higher running costs
- (depending on the flow of communication) sometimes longer waiting times until questions are answered
- A certain dependence on the service provider
Hybrid solution: The best of both worlds
Many founders choose a middle way. You will do simple preparatory work yourself, for example:
- Digitally sort and upload receipts
- Check incoming payments
- Add notes to documents
Your tax advisor will then carry out the audit and financial statements. In this way, you save costs, keep an overview and can still rely on professionally clean accounting.
Comparing bookkeeping software for UG: Which solution is right for your entrepreneurial company?
Regardless of whether you do your bookkeeping yourself or work with a tax consultant: The right software is crucial to simplify processes and avoid errors. Modern accounting solutions automate many tasks, help you with double-entry bookkeeping and make it easier to exchange information with your tax advisor.richtige Buchhaltungssoftware ist entscheidend, um Abläufe zu vereinfachen und Fehler zu vermeiden. Moderne Buchhaltungslösungen automatisieren viele Aufgaben, unterstützen Sie bei der doppelten Buchführung und erleichtern den Austausch mit Ihrer Steuerberatung.
The following is an overview of popular tools that are particularly suitable for UGs. Many of these programs can also be used for the accounting of a GmbH. This is particularly practical if your UG is growing or if you are planning to switch to a GmbH in the long term — because in many cases, the software can simply continue to be used.
integral
With Integral, you can rely on an all-round solution for accounting for your UG. The solution is particularly suitable for small and medium-sized companies that want to efficiently organize accounting and tax advice and obtain various services from a single source.Steuerberatung effizient organisieren und verschiedene Leistungen aus einer Hand beziehen möchten.
The most important functions include automated booking processing, document management, payroll and the ability to prepare tax returns and annual financial statements — for example in collaboration with a tax consultant.
The user interface is clear and structured. Since Integral places great value on automation, you only invest as much time in your accounting as is really necessary. You also benefit from direct contact with a tax advisor who will answer your questions promptly.
Lexware
Lexware's accounting software is aimed primarily at small and medium-sized companies or UGs. The integrated functions include double bookkeeping, annual financial statements, EURE, connections to online banking, dunning and DATEV. The menus are intuitively structured and therefore largely self-explanatory. There are also various tariffs available, which you can select to suit your needs.
DATEV
DATEV's solution is aimed primarily at law firms and larger companies. The system offers extensive functions related to accounting, bookkeeping, taxes and payroll.
Many companies use DATEV to work closely with their tax advisors. Due to the great level of detail, many law firms also recommend that their clients set up their UG accounting on DATEV.
UG cost overview: Do it yourself or hire tax advice
The question of whether you take care of the accounting of your UG yourself or outsource it depends, of course, on the available budget.
The following comparison helps you to better understand the differences.
Do UG bookkeeping yourself
Outsource UG accounting
If you decide to take over the accounting for your UG yourself, you will first incur costs for the software used and accessories, such as a scanner.
Most cloud accounting tools usually cost between 15 and 30 euros per month with a low volume of documents.
At the same time, you should consider that your own working time also has value. It is therefore worthwhile to ask yourself the question: “What could I earn during this time if I didn't have to take care of the bookkeeping myself? “This allows you to better assess whether this solution makes economic sense for you.
If you hire tax advice, the monthly costs for small to medium-sized UGs are usually between 150 and 500 euros.
How high the costs actually are depends primarily on the number of transactions to be booked, their complexity and possible additional services — such as payroll accounting. In addition, there are usually costs for preparing the profit and loss statement and the balance sheet. These usually range in the range of 800 to 2,500 euros.
Apart from the fact that it is important to carefully calculate the accounting costs for your UG, you should not base your decision exclusively on financial expenses. This is because working with tax consultants usually involves less effort, more security and professional support. In the end, it all comes down to how important these benefits are to your company.
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A practical example UG accounting in detail
Mr. M. has recently founded a UG and specializes in e-commerce. So that he doesn't have to familiarise himself too intensively with double-entry bookkeeping, he has opted for a hybrid solution. He uses Integral to prepare his accounting while the final audit and financial statements are carried out by his tax advisor.
Mr. M. simply uploads his invoices via the platform. The data is automatically read out, processed and assigned to the appropriate processes. At the end of the month, he only checks and confirms the prepared advance sales tax return. This is then submitted to the tax office in due time.
The close cooperation with tax consultants is also particularly practical: Mr. M. knows exactly who to contact if he has any questions and receives prompt feedback. This allows him to concentrate on his day-to-day business while accounting is reliably organized in the background.
Because the solution is scalable, it remains flexible as it continues to grow. Should his UG be converted into a GmbH later, he can simply continue using Integral.
Bookkeeping, payroll and taxes,
on one smart platform
We handle your registration with the tax office – from tax registration to your tax number. Along the way, we work through the key decisions that will matter later.
Connect your accounts once so transactions and documents sync automatically. Your bookkeeping runs in real time and your BWA is prepared every month.
We handle your advance VAT returns (UStVA), Zusammenfassen Meldung (ZM), and all other filings directly with the tax office. Should any questions come up, we'll coordinate with you
Ongoing payroll for your employees and you – simple, digital and via app. Integral handles all communication with the authorities and social insurance funds for you.
Your annual financial statements are built directly from bookkeeping that's already kept clean – with no laborious rework. Tax optimization included.
Your tax advisor spots tax opportunities early and flags them to you – before deadlines dictate your decisions.
How to find the right accounting solution for your UG
Which accounting solution is right for your UG depends primarily on the following factors:
- the size of your company
- your budget
- the amount of time you want to invest
In any case, make sure that the software you want to use supports accounting, double bookkeeping, advance sales tax return and GoBD-compliant documentation.
Holistic solutions offer you the advantage of being able to use all functions relevant to the accounting of your UG from a single source. In combination with the opportunity to contact a tax advisor if you have any questions, you create a reliable basis for your company.
Frequently asked questions: Accounting for UGs
What kind of UG is accounting?
The accounting of a UG includes the complete recording of all business transactions, i.e. income, expenditure, liabilities and receivables. As a limited liability company, UG is required by law to keep double bookkeeping. The collected data form the basis for the profit and loss statement and for the annual financial statements. With carefully managed accounting, you ensure transparency, avoid errors and strengthen the trust of authorities, investors and business partners.
How do I keep the UG accounting myself?
If you want to take over the bookkeeping of your UG yourself, you need suitable accounting software and basic knowledge of double-entry bookkeeping. They systematically enter documents, make bookings and regularly submit the advance sales tax return. In addition, you should regularly check bank accounts, the cash book, and open items so that all data remains up-to-date and complete. Working with a tax advisor makes sense in many cases at the latest when it comes to the balance sheet and annual financial statements.
Which software is suitable for UG accounting?
Good accounting software for UGs should support double-entry bookkeeping, accounting, and advance sales tax reporting. Suitable providers include Lexware, DATEV and Integral. Make sure that the software is GoBD compliant and — if you work with a tax consultant — offers a DATEV export or a suitable interface. Cloud-based systems are particularly practical, as you can also upload receipts on the go.
How much does accounting cost for a UG?
The costs depend on whether you do the bookkeeping yourself or outsource it. Cheap software solutions usually cost between 15 and 30 euros per month, but require your own time investment. For tax advice, you should expect around 150 to 500 euros per month — depending on scope and complexity. The annual financial statements are usually calculated additionally and usually cost between 800 and 2,500 euros. If you want to save costs, you can prepare the accounting and only have a tax advisor prepare the financial statements.
What are the legal obligations in UG accounting?
As a corporation, UG is required to keep double bookkeeping, prepare annual financial statements and comply with legal disclosure requirements.
In addition, you must — depending on the tax office's requirements — submit advance sales tax returns on a monthly or quarterly basis. Incorrect or incomplete bookkeeping can result in fines or back payments, even in the case of small UGs. It is therefore important to consistently comply with all legal requirements.
Taxes and accounting with Integral? That's how it goes!
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You can communicate directly with your contact person via our platform, clarify open issues and ask questions about your accounting.
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