Accounting with a tax advisor: The differences, advantages and disadvantages

There are many reasons for having your bookkeeping done by a tax advisor. In theory, you can take care of everything yourself and do the bookkeeping without a tax advisor. In Germany, no one is required to work with a tax advisor.

However, practice shows that this is exactly what makes sense when your business develops, complex business transactions arise and everything has to be documented in accordance with the principles of proper accounting.
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Some of the main reasons why working with a tax advisor is worthwhile include:

1. Professional security and legally compliant accounting
   Tax advisors have in-depth knowledge of commercial and tax law. You ensure that your bookkeeping complies with current legal requirements — in particular the GoBD. This minimizes the risk of errors, inquiries from the tax office or complaints during tax audits.
2. Saving time through clear processes
   With a tax advisor at your side, you can concentrate on your core business. Whether you let a tax advisor do the bookkeeping or just outsource individual tasks — clear agreements and digital interfaces will minimize your workload.
3. Individual tax advice
   While the accounting department presents standardized processes, your tax advisor offers you individual scope for action: for example when choosing depreciation methods, making investment decisions or drafting contracts and reserves for tax purposes.
4. Avoiding missed deadlines and formal errors
   Tax advisors keep an eye on all relevant deadlines and check the formal accuracy of the documents. This allows you to ensure that, for example, sales tax returns, annual financial statements or tax returns are submitted punctually and correctly.
5. Legal certainty in the event of changing requirements
   Tax regulations change regularly. A tax advisor is required by law to receive continuing education. As a result, you benefit from up-to-date information and stay up to date on all topics relating to accounting and taxes.

The tasks that your tax advisor performs depend on your needs. You can let the tax advisor do all of the bookkeeping or just delegate individual areas — such as the annual financial statements or payslip.
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The following sections provide you with an overview of all areas that your tax advisor can take care of.

The bookkeeping
On request, tax advisors can take over ongoing bookkeeping — i.e. posting business transactions based on your receipts. This includes income, expenditure, cash movements and bank transactions. Accounting forms the basis for business evaluations and the annual financial statements. This also includes checking for completeness and GoBD compliance.

Payroll accounting
If you employ employees, your tax advisor will take care of all legally required reports and calculations. These include:

• payslips
• Payroll tax returns
• DEÜV notifications to health insurance companies
• Certificates for employment agencies, pension or accident insurance
• Contribution statements and annual reports

The advance sales tax return
Anyone who is subject to sales tax must regularly report their sales tax to the tax office. Your tax advisor can also take on this task for you. He also keeps an eye on your sales and tells you when you need to report on a monthly or quarterly basis, for example.

The annual financial statements and tax return
Your tax advisor takes care of your annual financial statements, either in the form of a balance sheet or an EEU, and also prepares the associated tax returns, for example for commercial or sales tax.

The general consultation
The tax advisor you work with is your first point of contact if you have any questions about your accounting. You can also make regular appointments with him, for example to plan your investments.

Communication with the tax office
Sometimes it happens that the tax office has questions about your tax. In these and other cases, and for example during a tax audit, your tax advisor becomes the point of contact for the authorities and ensures clear communication.

The amount of Accounting costs with a tax advisor depends on several factors. In particular, the size of the company, the effort involved in accounting and the services you use play a decisive role here. In most cases, the basis is Tax Consultant Remuneration Code. It represents a fixed fee framework that you can use as a guide.

In addition, the following details affect the cost level that you should use to calculate:

• the number of booking records, for example per month
• the legal form of your company (The accounting of a GmbH or a UG, for example, is significantly more complex than is the case with a sole proprietorship.)
• the type of bookkeeping (double bookkeeping or EURE?)
• any additional benefits, for example if you have hired employees and your accountant should cover payroll accounting

Smaller companies and freelancers usually pay around €200 to €365 for their ongoing bookkeeping. Medium-sized companies should calculate around 500€ for the same period.

Payroll accounting costs around €20 per employee per month. The cost of the annual financial statements depends on their complexity. However, sums of 2,000€ and more are not uncommon. You should also expect around 500€ to 1,000€ per tax return.

However, you can in turn deduct the costs of your company tax return from tax. They reduce your profit. The situation is different with your private income tax return. This is not operationally deductible.

By properly preparing your accounting department, you can make things easier for your tax advisor and thus ultimately save money. The fewer queries he has, the easier your bookkeeping is.
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The following tips will help you:

1. Sort all documents and ensure that they are complete.
   The first step is to sort all relevant income and expenditure documents. This includes invoices and receipts. Organize them chronologically by type and introduce individual categories, such as “travel expenses” or “advertising costs.”
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2. Download bank statements and the like.
   So that your tax advisor can see what amounts you have paid or what sums you have received, provide him with your account statements and credit card statements. If you use PayPal or other payment services, send him all documents here as well.
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3. Create a list of invoices.
   Here you can note which amounts are still outstanding and who has already paid their bill. In this way, your tax advisor can see which receivables or liabilities still exist.
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4. Talk to your tax advisor about regular payments.
   If you have been working with your tax advisor for a long time, he will certainly know exactly what amounts, for example for rent, leasing, etc., will be deducted from your account. However, when you sign new contracts, you must communicate this. This allows your tax advisor to track everything.

It is best to briefly talk to your tax advisor and ask him what he wants in terms of preparing your accounting — even if you have decided to take over the bookkeeping from the tax advisor and only outsource pure tax advice in the future. A lot of information on the subject of “taxes” can also be found on the website of the Federal Chamber of Tax Advisors, among others.

If you have decided not to handle your bookkeeping yourself, you should always opt for a tax advisor who is right for you and your company. After all, this is, among other things, a question of trust.
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Choose a tax advisor with whom you feel good, who knows your industry and who understands your company. This allows you to take care of your day-to-day business while your tax advisor has your back, communicates with the tax office for you and is always available to answer any questions you may have.