Category: Dictionary

Meaning of Accounting 2

Meaning of Accounting 2

Differentiation between partnerships and corporations

There are significantly more and stricter rules for corporations than for small partnerships. For example, they explicitly exclude voting rights that exist for the rest of the merchants. Likewise, the special provisions of national accounting (HGB) often require more details in the individual reports. Even within the group of corporations there are again gradations in the commercial law obligations. These are based on the sales volume, the balance sheet total and the number of employees.

Since January 1, 2005, capital market-oriented companies have had to prepare their entire annual financial statements in accordance with international accounting standards (IFRS). The above-mentioned option continues to apply to corporations not oriented towards the capital market. Instead of national accounting (HGB financial statements), you can also prepare accounting according to IFRS.

International accounting (IFRS)

The abbreviation “IFRS” stands for “International Financial Reporting Standards”. Put simply, these are international standards and regulations drawn up and formulated by the International Accounting Standards Board (IASB). All of these are intended to harmonize international accounting in companies. The aim is to be able to provide international creditors, shareholders and target groups interested in the company with understandable but also comparable information about the economic and financial situation of a company.

Structure of international accounting and differentiation to accounting according to HGB

In contrast to accounting according to the German Commercial Code (HGB), international accounting is not a self-contained set of rules with generally applicable regulations. The regulations of the IFRS are much more detailed than the provisions set out in the HGB. This large difference can essentially be explained by the fact that international accounting deals with relevant individual issues. This not only results in repetitions, but also in redundant information. All of these points ensure that the total scope has increased enormously since the first execution. The basic structure of international accounting consists of three parts: the framework, the standards and the interpretations.


The so-called framework forms the basis on which the standards and interpretations just mentioned are built. Basically, this means nothing else than that the substantive concretization of individual questions and facts always takes place from the bottom up. So from the framework to the standards to the interpretations. The framework therefore serves as the basis for international accounting. It not only provides general information on the objectives of the IFRS, but also provides relevant information on the design of company financial statements. However, the framework information is not to be regarded as binding.


Compared to the framework, the standards are a little more specific, because they provide both the formal structure to be fulfilled and the presentation for annual financial statements. In particular, the following is regulated: A company must disclose its entire financial and asset position twice a year, at the beginning and at the end of a financial year. In addition, the annual financial statements must reflect the following information:

  • The overall success
  • Any changes in equity
  • Detailed information on cash flows

In addition, the notes to the balance sheet must not only contain information on the accounting and valuation methods used, but also general explanations. To date, international accounting has comprised a total of 36 of the standards just mentioned. All of these deal with a specific accounting problem. In addition to definitions of terms, this also includes discussions of individual regulations.


Last but not least, we would like to dedicate ourselves to the interpretations, because they serve as a supplement to the standards. Basically they are nothing more than their official interpretation.

Worth knowing: Since the beginning of 2005, international accounting (IFRS) has been mandatory for large, capital market-oriented companies and groups. Nevertheless, the conclusion according to the German Commercial Code is required, because this is necessary for the assessment of taxes. In summary, this means that the cost of preparing the annual financial statements of German companies has almost doubled since 2005. Nonetheless, international accounting (IFRS) is viewed quite positively overall, because it contributes to standardization and comparability on an international level.

How do you do the accounting?

The booking of all business transactions forms the basis of the accounting. The principle of double-entry bookkeeping is always applied here. That means: every business transaction is recorded twice. In principle, the same value is posted in debit and credit . All business transactions occurring during the year are listed in the annual financial statements at the end of the year. For this, large companies have to compare all expenses and income in the income statement so that a decent operating result can be determined from this. The balance sheet is then drawn up.

Accounting tasks

In principle, accounting has three main tasks. This includes the documentation, the distribution of dividends and the provision of information. The documentation function serves as a basic task and results from the fulfillment of the other two tasks. As a result, accounting has the two central tasks of conveying information and measuring dividends. These two purposes are of equal importance to each other. In addition, they pursue an extremely important goal, because they ensure a balanced relationship between the diverging final recipients.

Scope of accounting

The numerous companies are divided into different size classes depending on their total assets, sales and number of employees. Accordingly, the scope of the accounting differs depending on the size class of the respective company. Small corporations, for example, only have to disclose the balance sheet, but not a profit and loss account . In addition, in this case there is no obligation to examine. For large companies and corporations, however, the accounting is much more extensive. Both the balance sheet and the annual financial statements including the notes, management report, proposal for the appropriation of profits and the supervisory board report must be disclosed in full. In addition, the annual financial statements are checked by an auditor.

Annual financial statements

The annual financial statements serve as a detailed summary of important information about the economic condition of a company. Small business owners have it a little easier here, because the income-surplus calculation is sufficient for the annual financial statements. In the annual financial statements, all information is summarized that is created at the end of a company’s financial year. Accordingly, the financial statements provide a brief overview of the financial condition of a company.

Accounting 2

Meaning of Accounting

Meaning of Accounting

The accounting gives an impression of the economic situation of a company as well as the use of financial resources, for example in the form of profits. In Germany, the Commercial Code, the Publicity Act and the Tax Code result in a so-called accounting obligation. But what about accounting? In this article, we will explain to you what you should pay attention to with regard to accounting in order to avoid any problems.

Accounting regulations & accounting requirements

Accounting regulations cover a wide variety of areas. The following always applies: All companies are obliged to keep accounts. As a rule, this is double-entry bookkeeping. Every now and then, however, simple bookkeeping is sufficient. In addition, companies must prepare a balance sheet and an income statement. Corporations have to comply with significantly more regulations, because they are also obliged to prepare an appendix and a stock report. The duties of a company are specified in detail.


If you are obliged to double-entry bookkeeping according to § 242 III HGB , you can read everything on the subject in our lexicon article.

In principle, however, the following applies: Every company must comply with a number of accounting regulations that ensure that both external and internal target groups can gain a realistic picture of the financial situation as well as income and expenditure .

Accounting procedure

Proper accounting forms the basis for optimal accounting. All bookkeeping data are summarized within the framework of the accounting and thus provide information about the financial and economic situation of a company. The use of financial resources can also be shown in the best possible way with this approach. In the following, we would like to show you the most common methods for collecting information on accounting.

These include the following:

  • Income surplus account (also called EÜR for short)
  • Double-entry bookkeeping
  • Cameralistics

Differentiation between internal and external accounting

As already mentioned, the general task of accounting is the complete recording and evaluation of all data generated in the company, which can be divided into two different areas:

Internal accounting

The internal accounting is basically operated in the form of the cost / revenue calculation. With this type, all costs should primarily be determined. Likewise, these are then added to the respective cost factors in connection with the cost bearers or the products according to their cause.

What is special about it is that internal accounting is practically not subject to any statutory regulations. This is a purely imputed invoice that is based exclusively on information from the past and future. The collected data serve as the basis for price determinations and profitability controls in the form of key figures . This allows optimal operational success to be determined.

In internal accounting, a target group is always addressed that is within the company or the group. This includes, for example, control bodies and company management. Every now and then, however, external third parties also come into contact with the information.

Example: A company sends a loan request to a bank. However, this would like to protect itself before lending and therefore requires inspection of the company’s internal documents.

External accounting

In contrast to internal accounting, external accounting is subject to a number of legal requirements. These include, for example, the regulations from the Commercial Code (HGB). Using the numerous instruments of the annual financial statements, such as the profit, loss and balance sheet, the earnings, assets and financial position are presented.

The most important addressees include the tax office, banks, all creditors and possible investors. For these, the comparison with other companies is the most important. Exactly this process is only possible if certain rules are adhered to when creating the external accounting. This begins, for example, with the representations used, the designations and numbers used and their creation through to all other relevant information. In addition, state auditors such as the tax office have it much easier to find their way around company financial statements, because all financial statements are structured according to the same scheme.

Summary overview:

Internal accounting External accounting
The goal Documentation, planning, control and management Payment measurement and information function
The addressees Internal persons such as the company management Persons outside the company such as creditors, suppliers or shareholders
Applicable legal regulations As a rule, there are no statutory regulations Commercial and tax regulations must be observed
The base size Costs and revenues as well as deposits and withdrawals Expenses and income as well as incoming and outgoing payments
The reference object Either a single area in the company or the entire company or a group Always the entire company or the entire group
The reference period The reference space depends on the respective purpose of the invoice: during the year in the cost / performance calculation and for several years in the investment calculation Usually exactly one year
Relevant instruments Investment, finance, cost and performance accounting Balance sheet, notes, statement of equity, management report, segment reporting, cash flow, income statement

Accounting according to HGB and IFRS

There is national accounting according to HGB and international accounting according to IFRS. Both differ in fundamental things. We’ll tell you what the differences between the two types of accounting are in the following lines:

National accounting (HGB)

Before we can devote ourselves to national accounting in more detail, we would like to briefly explain the term “HGB” to you. The abbreviation “HGB” stands for the German Commercial Code. This regulates all the important points with regard to the commercial law applicable in Germany. The commercial code is primarily based on the fact that the legal certificate is generally assumed to be given. This makes all legal transactions between merchants much easier.

In addition to these core regulations, the HGB also deals with other legal forms . These include the following: The limited partnership (KG), the open trading company (OHG)  and the silent partnership. But regulations for corporations can also be found in the German Commercial Code. This topic mainly deals with financial statements, reports and supplementary regulations for financial service providers such as insurance companies, banks and cooperatives.

Worth knowing: The HGB is strongly influenced by European legislation, so the German Commercial Code is a constantly changing law. Nevertheless, the HGB forms the basis of the accounting rules in Germany.


Meaning of Section 18 of the Income Tax Act

Meaning of Section 18 of the Income Tax Act

The German tax law is not only one of the most extensive of its kind in the world, but also one of the most complicated. This is not as important for an employee in a normal occupation subject to social insurance as it is, for example, for you as a self-employed person. A fundamental distinction is made here as to whether your activity is to be described as exercising a trade or whether you are a freelancer. In Section 18 of the Income Tax Act, a distinction is made between what is meant by income from self-employment.

What is § 18 EStG?

Section 18 of the Income Tax Act describes the tax delimitation of self-employed work compared to other types of income. This paragraph applies to income from professional activities. Section 18 of the Income Tax Act (EStG), paragraph 1, describes which professions and professional groups are to be recognized as freelancers and thus fall under this law with regard to taxation.

What is Freelance Income?

If you work as a freelance, this means first of all, roughly speaking, that you are selling to customers, clients or patients a service that you have created yourself. This is very different from a self-employed trader. As a freelancer, you have to provide evidence of training that entitles you to practice. This is usually not the case with a trade. As a freelancer, you are very dependent on your skills and knowledge. Therefore, in § 18 EStG, you are also granted that you incur fewer costs, i.e. taxes, than is the case with a commercial enterprise.

Which professions fall under the designation of freelancers?

18 EStG defines who is a freelancer from a tax law perspective. There is the so-called catalog of freelancers for this. In addition, it is stipulated that as a freelancer, if your profession is listed in this catalog, you do not have to draw up a balance sheet . You are also not obliged to pay trade tax and you are not a compulsory member of the Chamber of Commerce and Industry. The catalog of freelancers lists professions that are self-employed activities in the following areas:

  • scientific activities
  • writing activities
  • artistic activities
  • educational activities
  • teaching activities

Four groups, in which the catalog professions are classified, are derived from these areas. These four groups are:

  • Health professions
  • Legal and business advisory professions
  • Technical and scientific professions
  • Media and language professions

In plain language, this results in the following professions, which are considered freelance activities.

doctors Architects Dentists
dentists Commercial chemist Physiotherapists
Veterinarians Auditors Journalists
Lawyers tax consultant Photo reporter
Notaries Advisory business and economists interpreter
Patent attorneys Sworn accountants translator
Surveyors Tax agents Pilots
Engineers Naturopath Similar professions

What are similar professions?

You will now wonder what similar professions mean. This is not defined in § 18 EStG. In this case, the rule applies that it is checked in each individual case whether this similar occupation can be assigned to the catalog of freelancers. Both case law and an expert opinion can bring clarity here. For example, for a long time it was very controversial whether a computer scientist is also a freelancer. In the meantime, the law has developed some practical principles that are applied. The broader and deeper a completed training has taken place and can also be proven, the more chances there are of being recognized as a freelancer. For example, a qualified computer scientist has been a freelancer for a long time, even if he cannot be found in the catalog.

Who is a freelancer and who runs a business?

You will only be recognized as a freelancer if you, as an entrepreneur, meet the characteristics, without exception, that are also indicative of a catalog occupation. If this is not the case, the classification as a trader takes place. The definition from a legal point of view is that for a freelance activity there must be adequate professional training or a university degree.

Important! You are also freelance if you are assigned to a certain group and employ appropriately trained workers in your company. In this case, the prerequisite is that your specialist knowledge is correspondingly high, that you work in a managerial and independent manner. This means that you can also hire employees in your company as a freelancer.

The indicators for freelance work

In the Income Tax Act itself, there is no precise definition of liberal professions. As mentioned, only the catalog of freelancers is listed in § 18 EStG Paragraph 1. However, experts in tax and legal matters define liberal professions as follows. The freelancer must carry out his profession under the following conditions:

  • The basis for his activity is his special professional qualification or his special creative talent
  • he has to do it personally, in a managerial and responsible manner
  • he must be completely independent from a technical point of view.
criteria description
Professional qualification Tax law is linked to the professional code if it provides that you, as a freelancer, can submit a legal professional code such as an exam before you are allowed to carry out this activity and you are also allowed to use the corresponding professional title.
Creative talent With this criterion, it is not enough if you yourself are perhaps enthusiastic about your singing voice. Recognized artists usually decide whether they have a creative talent. There is a well-known definition by Joseph Beuys, who says that everyone can be an artist. However, it is not made that easy for you when classifying liberal professions.
Personal exercise To meet the requirements of a freelancer, your job performance must be paramount. It is not enough if you only bring capital into your company, as is possible with a commercial enterprise, for example. Nevertheless, you can of course hire employees to support you in your work.
Management and personal responsibility You have to be managerial and responsible at all times in your work. As already described, you can get employees on board. But you yourself have to remain the leading head. In the event of illness, for example, you can be represented, but only by a specialist with the appropriate qualifications.

What types of profit determination are there for the self-employed?


The determination of profits is always dependent on the accounting requirement for the self-employed .

Another criterion for determining profits is what is known as the type of profit income.

Type of profit determination Profits from § 13 EStG: Agriculture and forestry Profits from § 15 EStG: commercial enterprise Profits from § 18: independent work
Determination according to average rates Possible if there is no legal obligation to keep accounts
Business asset comparison In the event of a legal obligation to keep books or in the case of voluntary keeping of books With legal obligation Only if books are kept voluntarily. There is no statutory accounting requirement
Income surplus account If no books are kept, it is not required by law and the application of § 13a EStG is not given If there is no statutory accounting requirement and books are not kept voluntarily If there is no voluntary keeping of books

Use for secondary employment

If you do a freelance job that is only part of the job, § 18 EStG also applies in this case. The tax-relevant profit is also relevant here. From a tax point of view, it does not matter whether you generate your income from main or secondary employment. This is why there are no separate tax regulations for secondary employment in the liberal professions, as regulated in § 18 EStG.

How does § 18 EStG apply to partnerships?

With partnerships you have to pay particular attention to the validity of § 18 EStG. The rule here is that this paragraph only applies if ALL co-entrepreneurs also perform activities within the meaning of the freelance definition. If there is a co-entrepreneur who does not meet these requirements, the entire company is considered a commercial enterprise. As a partnership also is here GbR , the civil-law counted.


  • Section 18 of the Income Tax Act regulates which activities count as freelance activities
  • There is no obligation to keep accounts under Section 18 of the Income Tax Act. A simple EÜR is sufficient, which you can easily create with the help of an EÜR template .
  • The allocation of whether it is a freelance occupation is based on the catalog of freelancers defined in Section 18 of the Income Tax Act
  • Section 18 of the EStG also applies if the freelance activity is only carried out as a sideline.


Paragraph 18 of the Income Tax Act describes the differentiation between freelance work and self-employed work from a tax point of view. For you as the founder, it is important to know whether your profession fulfills the status of a freelance activity. This is also regulated in § 18 EstG. A so-called catalog of freelancers is available here to classify occupations. You will find freelance jobs mainly in the fields of business and law, media and language, technology and science and the medical profession.

Income Tax Act

Meaning of Tax Liability of the Beneficiary

Meaning of Tax Liability of the Beneficiary

Globalization continues to advance and companies have long been active internationally. In order to ensure proper invoicing, the recipient of the service is liable for tax in accordance with § 13b UStG in some cases . You can find out here whether you fall into the reverse charge procedure.

What does the recipient’s tax liability mean?

The tax liability of the service recipient according to § 13b UStG occurs when internationally active companies work together and are based in different countries. In such a case, as a service provider, you can only issue your invoice in the form of a net invoice . A so-called reverse charge invoice means that your customer must determine the sales tax himself and then claim it from the responsible tax office. This amount can be shown as an input tax deduction . You can find numerous templates for a reverse charge invoice on the Internet. You only need to fill in the pre-filled template with your individual details and you can be sure that all mandatory information on an invoice is included are included.

What causes the change of tax liability of the service recipient?

Paragraph 13b of the Sales Tax Act clearly stipulates which services must be taxed according to the so-called reverse charge principle:

Supplier Receiver § Importance
Entrepreneurs abroad – within the European Union Entrepreneur or legal person § 13b Abs. 1 UStG This includes other services that are carried out by a company in another EU country.
Entrepreneurs abroad – outside the European Union Entrepreneur or legal person § 13b Abs. 2 Nr. 1 UStG Both other services and work deliveries from abroad must be invoiced as a reverse charge service in accordance with Section 13b (2) No. 1 UStG.
Collateral provider Entrepreneur or legal person § 13b Abs. 2 Nr. 2 UStG The recipient of the service is liable for tax if items are delivered via a security provider. However, this procedure must take place outside of bankruptcy proceedings.
Real estate transfer tax Entrepreneur or legal person § 13b Abs. 2 Nr. 3 UStG All sales that fall under the law of real estate transfer tax and at the same time are waived the VAT exemption.
Construction work Entrepreneur or legal person § 13b Abs. 2 Nr. 4 UStG According to § 13b, all types of construction work are to be invoiced using the reverse charge procedure. This does not include monitoring and planning services.
Deliveries of electricity and gas Entrepreneur § 13b Abs. 2 Nr. 5 UStG If electricity is provided by a supplier based abroad, the recipient of the service is liable for tax. Compare also § 3g UStG
Building cleaning Other building cleaning companies only § 13b Abs. 2 Nr. 8 UStG Building cleaning can only be charged without sales tax if the services are between two companies that are both active in the cleaning industry.
Gold ware Entrepreneur § 13b Abs. 2 Nr. 9 UStG From a minimum of 325 thousandths of a fineness gold goods are to be settled according to 13b with the tax liability of the service recipient.
Delivery of certain metals Entrepreneur Section 13b (2) No. 11 UStG All metals that are described in Appendix 4 UStG are to be settled in accordance with 13b.
Delivery of scrap metals Entrepreneur § 13b Abs. 2 Nr. 7 UStG Industrial scrap, scrap metal and other waste materials are subject to the reverse charge procedure.
Deliveries of telecommunications equipment Entrepreneur § 13b Abs. 2 Nr. 10 UStG From a minimum amount of 5,000 euros, the tax liability lies with the recipient of the service.
Emissions trading Entrepreneur § 13b Abs. 2 Nr. 6 UStG Section 3 No. 3 of the Greenhouse Emissions Trading Act describes the transfer of authorizations which, according to Section 13b UStG, must be offset without sales tax.

When is the tax liability not transferred to the recipient of the service?

According to Paragraph 13b (6) of the UStG, there are some exceptions for which no tax liability of the recipient of the service can be claimed in the invoice. The basic requirement is always that the service provider is based abroad. The following services do not fall under the normal regulations of § 13b UStG:

  • Transportation of people by taxi
  • Cross-border passenger transport by air
  • Passenger transport in accordance with Section 16 (5) UStG “Individual transport taxation”
  • Granting of entry authorizations for exhibitions, congresses or trade fairs
  • Restoration services that take place on the ship or in the train
  • Other services that have to do with the events of exhibitions or trade fairs

In plain English, this means that you submit a normal gross invoice including sales tax to your customers if you are active in the above-mentioned service sectors.

What does this mean for your invoicing?

As a supplier, you are usually responsible for calculating the sales tax for the invoice amount and paying it to the tax office. However, if the recipient of the service is liable for tax in accordance with § 13b UStG, you are not allowed to state any sales tax on your invoice. Only a note for the beneficiary needs to be given. This can look like this:

  • “§ 13b Tax liability of the recipient of the service sales tax law.”
  • “The invoice amount is stated without sales tax, since the reverse charge procedure applies here.”
  • “According to § 13b UStG, the recipient of the service owes the sales tax.”


With an invoice program you can easily create your invoices with reference to the tax liability of the service recipient.

Who has to issue the invoice and who has to pay the sales tax?

The regulations regarding intra-community services are mandatory. As a service provider, you have to issue an invoice with the wording on the tax liability of the recipient of the service. Well, if you issue the invoice properly, your customer will be obliged to submit the sales tax to the tax office. If you issue a gross invoice by mistake, you will have to pay the tax amount in addition.

Briefly summarized: FAQ on the subject of “Tax liability of the service recipient”

Why reverse charge?

The reverse charge procedure is intended to avoid tax fraud based on the carousel principle. Here, the tax liability is reversed. This means that it is not you as the biller but your customer who must pay the sales tax. So you make a net invoice yourself.

What is Clause 13b?

Paragraph 13b UStG stipulates when the recipient of the service is liable for tax. Accordingly, your customer has to pay the sales tax to the tax office if the following cases exist:

  • You are based in (EU) countries and have your company headquarters there.
  • If it is a sale by the protection seller that takes place outside of bankruptcy proceedings.
  • For sales that fall under the Land Transfer Tax Act.
  • When construction work is performed on a company that is itself active in the construction industry.
  • When you bill for gas or electricity deliveries. The same applies to scrap metal, industrial scrap and other waste materials in accordance with Appendix 3 UStG
  • For deliveries of telecommunications equipment with a value of more than 5,000 euros.
  • For gold goods with a fineness of at least 325 thousandths.
  • If you deliver metals that are listed in Appendix 4 UStG.
  • For building cleaning that is carried out for other building cleaning companies.

What is the beneficiary?

The term “recipient of services” is understood to mean the person who uses your services. So, in simple terms, these are your customers.

What is an intra-community other service?

An intra-community service is a service in which the recipient and the provider are located in two different EU member states. Both parties must be active as entrepreneurs. In the UStG, other services are generally understood to mean services. If these conditions are met, the invoice has the tax liability of the recipient of the service. In such a case, the service is considered to have been carried out at the customer’s company headquarters, regardless of where the service provider actually provides the service.


The introduction of the reversal of a tax liability towards the tax office was introduced to prevent possible fraud of various entrepreneurs. According to § 13b UStG, construction work, intra-community services, trading in gold, electricity and much more are invoiced with the so-called reverse charge process under certain conditions. The reference to the tax liability of the service recipient must be clearly legible in the invoice. A tax liability of the service recipient is settled via the SKR 04 account in your annual balance sheet.

Tax Liability of the Beneficiary

Meaning of Social Injustice 2

Meaning of Social Injustice 2

Inequality in the Labor Market

Data on inequality in the Brazilian labor market confirm the persistence of an old social wound. According to a survey by the Inter-Union Department of Statistics and Socioeconomic Studies (Dieese) released on Tuesday, blacks and browns have fewer opportunities than whites.

Data on inequality in the Brazilian labor market confirm the persistence of an old social wound. According to a survey by the Inter-Union Department of Statistics and Socioeconomic Studies (Dieese) released on Tuesday, blacks and browns have fewer opportunities than whites. The activities they perform require less qualification. As a result, wages are lower. The figures show a full-length portrait of the enormous injustice that exists in the country. Blacks and browns make up almost half of the population. No less than 46%. But the average income of those who find the Southeast. In the most developed region of Brazil, whites received a monthly average of 4.5 minimum wages in 2001; blacks, 2.3; the brown ones, 2.2.

The research presents data capable of explaining the disparity in remuneration. The less privileged ethnic group finds occupation in agriculture, civil construction and provision of services, mainly domestic. These are activities that require limited education and little qualification.

A vicious circle is formed. Non-whites earn less because they work in activities that pay poorly. They work in activities that pay poorly because they lack the conditions to compete for jobs that pay higher wages. Without sufficient income, they are unable to seek better qualification and, with that, to ascend socially. The unevenness stems much more from poverty than from color. Here, undoubtedly, is the knot that needs to be untied to reduce the injustice that prevailed in Brazilian society for 500 years. Compensatory policies are welcome in the short term. They keep children in classrooms and prevent young people from entering the labor market early. But they are not the definitive answer to the problem.

The challenge necessarily involves the excellence of the public school. Only with access to high-level education, cutting-edge technology, and diversified reading, is it possible to make the dispute for good jobs democratic. In short: by strengthening the weak link in the chain, the possibility of narrowing the gap between the poor and the rich opens up.

The Issue of Agrarian Reform: An old Brazilian challenge

The poor distribution of land in Brazil has historical reasons, and the struggle for land reform involves economic, political and social aspects. The land issue affects the interests of a quarter of the Brazilian population who make their living from the countryside, between large and small farmers, ranchers, rural workers and the landless. Setting up a new land structure that is socially just and economically viable is one of the biggest challenges in Brazil. In the opinion of some scholars, the agrarian question is for the Republic just as slavery was for the Monarchy. In a way, the country was freed when it freed slaves. When you no longer need to discuss land ownership, you will have achieved new liberation.

With its territorial privilege, Brazil should never have a conflicted field. There are more than 371 million hectares ready for agriculture in the country, a huge area, which is equivalent to the territories of Argentina, France, Germany and Uruguay combined. But only a relatively small portion of that land has any type of plantation. About half are used for livestock. What is left is what the experts call idle land. It does not produce 1 liter of milk, a sack of soybeans, 1 kilo of potatoes or a bunch of grapes. Behind so much idle land is another Brazilian agrarian problem. Until the past decade, almost half of the arable land was still in the hands of 1% of farmers, while a tiny portion, less than 3%, belonged to 3.1 million rural producers.

“The agrarian problem in the country is in the concentration of land, one of the highest in the world, and in the latifundium that produces nothing”, says professor José Vicente Tavares dos Santos, dean of the Federal University of Rio Grande do Sul. with its Latin American neighbors, Brazil is a champion in land concentration. It does not come out of the lead nor compared to countries where the issue is explosive, such as India or Pakistan. Gathering so much land in the hands of a few and vast unproductive extensions, Brazil set up its own scenario to set the field on fire. This is where conflicts arise, which in the last twenty years have claimed hundreds of deaths.

The Brazilian agrarian problem began in 1850, when the slave trade ended and the Empire, under pressure from farmers, decided to change the property regime. Until then, the land was occupied and the emperor was asked for a title. From then on, with the threat of slaves becoming rural landowners, no longer constituting a backyard of almost free labor, the regime became that of purchase, and no longer of possession. ”While labor was slave , the land was free. When work was free, the land became a slave, ”says professor José de Souza Martins, from the University of São Paulo. At the time, the United States also discussed land ownership. Only they did the exact opposite. Instead of preventing access to land, they opened the west of the country to anyone who wanted to occupy it – only the slave owners of the south were excluded. Thus, an agricultural power, a consumer market and a more democratic culture were created, since it was founded in a society of millions of owners.

Even if smallholders were unable to produce for the market, but only enough for their livelihood, it would already be a way out, at least, of urban misery. “Even being a Jeca Tatu is better than living in the favela,” says Professor Martins. In addition, settlements can be a solution to the tremendous migration that exists in the country. Any migratory flow has an agrarian problem behind it. There are the most evident ones, like the gauchos who went to Rondônia in the 70s or the northeasterners who are looking for a job in São Paulo. There are the most invisible, as in the interior of São Paulo, in the Ribeirão Preto region, the so-called Brazilian California, where 50,000 cold-buoys work in cutting cane from the alcohol and sugar mills for nine months. In the other three months, they return to their region of origin – most come from the very poor Vale do Jequitinhonha , in the north of Minas Gerais.

The settlement policy is not a cheap alternative. The government spends up to R $ 30,000 on each family that wins a piece of land. The creation of a job in commerce costs 40,000 reais. In the industry, 80,000. But these expenses are from the private sector, while, in the countryside, they would have to come from the government. It is pure state investment, even if the return, in this case, is high. Of every 30,000 reais invested, it is estimated that 23,000 will return to their coffers after a few years, in the form of taxes and even loan payments. In order to promote agrarian reform on a large scale, money is needed that never ends. It would be wrong, however, in the name of the impossibility of doing the most, to refuse to do even the least. The price of this refusal is there, in plain sight: wild urbanization, rising crime,


We all know that justice is done by men and that is why it is still full of partial interests and views of what is understood today as right or wrong. I say today because if we compare our laws with those of the Middle Ages, we will conclude that the latter are barbaric and monstrous, but at that time they were considered fair and natural. As much as we tried to leave them free from our passions, our Laws would still be imperfect because man cannot understand all Justice and we would still have the excluded, the ones that he would not be able to end, the “wronged”.

Contrary to human law, there is the one left by Jesus, which fits into any condition of human understanding, at any time or place, because it is based on the conscience of each person, on what each one of the best, “wishes to others what we would wish for ourselves ”. In this sense of Justice, add the collective character and the individual character prevails, since we are each responsible for applying it in our daily lives. We have not yet achieved it because we are extremely selfish beings, thinking only of ourselves, wishing the best for ourselves and others who take care of themselves, remembering the popular jargon of “each one for himself”.

If we verify that the responsibility is individual and that the small group is what makes the big, we will recognize that there is no “Social Injustice”, but our “Immense Egoism”.

Social Injustice 2

Meanings of Reminder

Meanings of Reminder

A reminder is also known as a payment reminder. It serves to formally put a debtor in default. This can and must be done if the customer does not pay an invoice on time. The written form is not compulsory, but you should send a warning in writing for reasons of evidence.

What is a reminder?

According to TOPBBACOLLEGES.COM, a reminder is a payment reminder. You have to clearly ask the creditor to pay an open account. The customer can be threatened with legal action with the reminder if he does not comply with the payment request. However, it is contrary to custom to do this directly when the first reminder is issued. Writing a reminder is subject to certain conditions.

The basis is always an invoice that has already been issued. When writing an invoice, you set a payment term . If the debtor exceeds the deadline set by the obligee in his invoice, a reminder may be issued. If a debtor informs the creditor that he will not pay the bill, there is no need to write a reminder. However, you can and should issue a reminder for reasons of evidence. With the help of the bank interface, checking the open items is child’s play, so that you always have an overview of open and overdue invoices.

When do you send a reminder?

As a rule, you do not send a reminder immediately if the customer has not met his payment term and it has only just passed. Usually, a dunning letter is only sent if the debtor has not paid the invoice within 30 days of the end of the set payment term. Special software is available for monitoring the payment dates, which takes over the invoicing and checking of the payment dates.

In general, the first reminder does not charge any reminder fees or default interest. You should only charge dunning fees with the second reminder. Upper limits apply to the reminder fees, which are regulated depending on the district of the respective higher regional court. Depending on the respective federal state, different upper limits apply. More on the subject of “dunning costs” below.

What reminder fees can I charge?

In essence, the law does not recognize any item that is called “dunning fees”. It is only regulated that the obligee can assert damage caused by default in the event of non-payment. This damage caused by delay is made up of

  • The cost of creating and sending the reminder
  • Late payment interest.

late payment interest

The default interest that may be charged is regulated very precisely. A creditor may raise five points above the base rate on the day on which the debtor is in default. The base rate is set by the Deutsche Bundesbank and published on the Internet by special portals. The base rate is currently -0.88 percent. This means that a creditor is entitled to interest and invoice the amount owed at 5.88 percent.

Calculation example

100 euros are owed over a period of 30 days. Then the debt interest is calculated as follows: 100 * 0.0588 / 12 = 49 cents

Dunning costs and collection

When it comes to the costs of a reminder, the situation is not that clear. If the creditor himself sends a letter, he can only invoice the costs for paper and postage. In most cases, the dunning costs then amount to around 5 euros. On the other hand, it becomes more expensive for the debtor if the creditor engages a debt collection company. Because the costs that this company charges, the creditor can charge the debtor. This quickly adds up to three-digit dunning costs.

However, the costs for the debt collection agency may not exceed the rates that a lawyer may apply for the same service. Therefore, the reminder fees are closely based on the fee schedule for lawyers. In addition, the creditor must disclose in detail the costs incurred as a result of the reminder. So you cannot estimate a flat rate of 50 euros without actually incurring these costs.

How do you send a reminder?

You generally send a written warning, and you have to refer to the respective invoice. You can create a dunning letter using a form. Usually this is done with the company’s letterhead and a corresponding text. You put the debtor in default and should clearly communicate this fact. If you want to write a reminder, you can send it by registered mail and return receipt. So you have such evidence that and when you sent the reminder. As a rule, you send three reminders, two weeks apart, before taking legal action.

What else should you watch out for when dunning?

When writing a reminder, the creditor should always remember that the reminder is a customer. Even if it is annoying when people do not pay their bills – attacking, threatening or abusive does not help. Apart from a lost customer, nothing has been gained this way.

When choosing a suitable debt collection company, one should not be guided by emotional aspects, but rather discuss with the service provider exactly the “pace” with which they should proceed against their own customers.


Meaning of Social Injustice 1

Meaning of Social Injustice 1

In the media we have collected information that tells us about needy children experiencing hunger and cold, homeless families, the unemployed, poor distribution of income, etc., leaving us stunned by so much “ Social Injustice ”.

In fact, Social Injustice is nothing more than the fact that there are situations in society that favor only a percentage (usually smaller) of the population while another part is left without access to the means, essential or not, for man.

In doing the research, we saw how comprehensive the subject that was entrusted to us is. Therefore, in the course of the work, we will mention some of the points that are part of Social Injustice.


Among the calamities that periodically plague the Earth, hunger stands out as a remnant of evolutionary primacy in the social area in which the human creature is found.

In a civilized society, in which someone dies of hunger , respect for life and human dignity has completely disappeared.

Hunger has always played a major role in the culture of peoples, making the periods in which it manifested in Egypt and the Middle Ages, several times during the wars, particularly that of the Hundred Years, and which has been repeated in the countries famous for its hideousness. poor in Africa, Asia and the Americas in modern times.

In a just society, the phantom of hunger could not manifest with the destructive rudeness, because the minimum right that the citizen has is to feed himself.

Even more cruel is the phenomenon of hunger, when it can be predicted, and, of course, avoided, or, at least, measures taken to diminish its gravity, mitigating the terrible consequences of the trail of destruction it leaves.

Not only is death from hunger hideous, but there are also the regrettable effects of it, such as the body’s lack of nutrition, expressed through a mental, emotional and organic problem.

The hungry individual becomes violent and attacks, as occurs with the animal that goes out, starving, hunting, being worse in the one who sees the family in agonized crackle, between hallucination and crime, due to the absolute lack of bread.

There are several factors that account for hunger in the world, including: the arable surface of the planet, which is insufficient to meet human needs; the diminished or almost zero purchasing power of the people; the ever surprising demographic increase; the small production yield per hectare; difficulty in transporting food; climatic variations; irregular and malformed eating habits; and, above all, human greed, the disinterest of governments when insensitive and greedy.

A demonstration of unusual wickedness is the presence of hunger on Earth, since the excess that is wasted would give to minimize the specter of despair of millions of creatures relegated to abandon and death.

Emergency measures are undoubtedly useful, however, having a character more of liberation from the conscience of guilt, than even of helping the disoriented crowds, whose disfigured facies frighten those who sleep demented by power and dissociated from the responsibility to comply the duties towards those who elected them for high administrative functions, at that moment fearing that the hungry will overthrow them from the position they enjoy…

With the exception of dictators, who have always ruled with the criminal dagger of discrimination, reserving stocked granaries for the soldiers who preserve them in command, becoming execrable, the Heads of Democratic States have a duty to avoid hunger or to resort to methods and techniques that reduce its harmful effects.

A just society is one that watches over its most needy members, contributing resources to elevate its citizens, offering them the conditions to which they are entitled, since the conquest of human rights after the French Revolution of 1789, when hideousness and governmental perversity gave way to freedom, fraternity and equality.

There remain, however, even today, several conditions equivalent to those that the philosophers of the Revolution tried to revert, and for whose purpose some of them gave blood and life, dreaming of the day when all human beings could enjoy at least food , housing, education, work, health, recreation, which are still denied.

In a free and competitive society, one should not only give food during calamitous situations, but create conditions for them to exist and be earned with dignity, instead of being offered as alms or charitable actions, in whose opportunities they become political flags or strictures of religious exaltation, exposing the miserable to social compassion, when everyone deserves, instead, respect and opportunity.

The hunger industry, on the other hand, has been maintained to assist ignoble individuals, who use it for illusory periodic electoral promises, when it is said that it will be promptly eliminated.

Having achieved the desired ends, however, the machine of disinterest in the people continues to maintain it, in order to be outrageous and more serious in the next opportunity.

Paradoxically, the war arsenals of developed countries accumulate weapons of high destructive power, which consume billions of dollars annually, aiming at destruction and death, when that money could be used for the preservation and ennoblement of millions of lives, eliminating hunger and the diseases that lurk.

On the other hand, warehouses and silos spread all over the world are full of grains, waiting for the acceleration and high prices, many of them producing high expenses, while part of their reserves rot or are devoured by pests, stimulating the hungry crowds to appeal to the plunder, for disorder, for mad violence. In some circumstances and places, they are stimulated by other interests, equally sordid, in the face of the outrageous measure of government officials who do not take preventive measures or organize work fronts, with the opening of wells and weirs to reverse the situation at the first opportunity, paying the amount due. rude effort of workers with fair wages and through these forgotten foods.

Social Injustice 1

Meanings of Entrepreneur Part II

Meanings of Entrepreneur Part II

The different directions of entrepreneurship

It would be fundamentally wrong to speak of THE entrepreneurship. Rather, this phenomenon is broken down into further sub-categories.

High-tech entrepreneurship

Here the corporate philosophy revolves primarily around the area of ​​innovative technology. It is characteristic that entrepreneurs often have to invest comparatively large sums here in order to be successful in the long term. The above-mentioned offers from funding programs are used comparatively often here.

Regional entrepreneurship

According to SPORTINGOLOGY.COM, entrepreneurs who focus on regional entrepreneurship focus – as the name suggests – on the special characteristics of their region. This is often reflected, among other things, in an individual corporate philosophy.

Social entrepreneurship

The addition “social” plays an important role with regard to this type of entrepreneurship. The entrepreneurs deal in their (sometimes very creative and unusual) ideas with solving social problems.

Corporate entrepreneurship

In a certain way, entrepreneurs are also characterized by their “thinking differently” in different areas. In the course of corporate entrepreneurship, great value is placed on not just living these characteristics at the beginning of a start-up, but also practicing them on an ongoing basis. This is to ensure that the problems of everyday life are met in an individual, creative way and that one’s own “roots” and the goal that stands above everything are not forgotten.


In this area of ​​entrepreneurship, the focus is on the environment or environmental protection. In this segment, it is often possible to specifically identify gaps in the market and ultimately to fill them.

Senior Entrepreneurship

Senior entrepreneurship is the name of a special phenomenon. Because: nowadays, more and more older people are deciding to start their own business. While some decisions of this kind are also the fear of not finding a new job in old age, others see senior entrepreneurship as an opportunity to realize oneself again before retirement.

Serial entrepreneurship

To put it simply, these are multiple founders. The specialty: a serial entrepreneur is never involved in several start-ups at the same time. This, by the way, sets him apart from the habitual entrepreneur.


Companies that work according to intrapreneurship pursue the goal that their employees should behave as if they were entrepreneurs. This is to ensure better identification with a brand.

Which entrepreneurs should you know?

Many successful entrepreneurs come from the USA. The best-known representatives here include …:

  • Steve Jobs, the man behind Apple
  • Jeff Bezos, the founder of Amazon
  • Bill Gates, the founder of Microsoft and “by the way” also the richest person in the world.

They are all probably perfect examples that the mix of an innovative idea and assertiveness can help you ultimately even become a millionaire or billionaire.

Inspirational words from experienced entrepreneurs

Entrepreneurs know the problem: sometimes it seems as if their own business idea has failed. If you keep playing with the idea of ​​literally simply giving up and switching back to a permanent position, it can help to deal with inspiring thoughts and quotes from experienced entrepreneurs.

Quotes like Larry Page’s. “Always do a little more than is expected of you!” Or “There is no point in being a creative and original thinker these days in the business world if you are not able to sell what you create. “David Ogilvy can often be found on relevant pages and can help to overcome one or the other moral low point.

Which entrepreneurs are there in Germany?

A look at the German economy shows that it would definitely be wrong to look exclusively to America when looking for successful entrepreneurs. Because there are also many people in Germany who have made the leap to success.

The most famous examples here include:

  • Natalie Mekelburger from Coroplast
  • Joseph Wilhelm von Rapunzel
  • Renate Pilz from Pilz GmbH & Co. KG
  • Adrian Pausder from Thermondo GmbH in Berlin.

Reading for the real entrepreneur spirit

Are you at the beginning of your career and want to find out more about your chances and possibilities? Maybe you are also looking for a little motivation? In all of these cases, it can help to focus on the right reading. But which books are particularly recommended here? Basically, the variety of books available naturally allows you to choose a work that is optimally adapted to your expectations.

However, the following are particularly popular in the field of entrepreneur books:

  • “Tools of the Titans” (T. Ferriss)
  • “Private Label: E-Commerce with Own Brands” (A. Frank)
  • “The 4-hour startup” (F. Plötz)
  • “Storytelling for companies” (M. Rupp).

Especially in connection with books about entrepreneurship, it is of course also true that you don’t have to read the classic chapter by chapter here. Rather, it can make sense to secure several books and to deal with the individual topics – as required – and to mark important points, similar to those in your studies.

Entrepreneurs Organization Germany

The Entrepreneurs Organization Germany offers a broad network. As part of the organization, interested parties not only have the opportunity to inspire each other, but can also take part in training courses. The entire organization is based on a voluntary principle and has been continuously developed over the years.

The result: an even broader range of offers, which can be ideally adapted to your individual corporate goals and with which you can not only promote yourself, but also any employees.

Step by step to becoming an entrepreneur

Developing an entrepreneur does not happen overnight, but is the result of a long process. It is particularly characteristic here that various steps are taken on the way to the “big goal”.

How do I become an entrepreneur?

Good question! In fact, there is no real secret recipe that you can use here. One factor that forms the basis for further developments here is the character of the entrepreneur. Because he decides how to proceed – even in crisis situations. In addition to character, it is of course also important to rely on other factors. For example, appropriate training and participation in training courses also play a major role here. Inspirational content can also often be found at trade fairs.

Focus on your goal!

This is an excellent tip that many successful people take to heart. Anyone who is annoyed about long working hours, pressure or one or the other financial bottleneck should keep in mind why they are taking on life as an entrepreneur and what advantages this decision offers them. Because who knows what he will take all the effort for, also knows that reaching the goal is worth all the effort.

Become a collector of information!

The secret of a good entrepreneur is, among other things, to think outside the box and, accordingly, to brainstorm generously. Who knows if certain information will not be helpful in the future, even if it doesn’t appear to be at first glance?

Fast adaptability and fast learning are required

Successful entrepreneurs also differ from their colleagues in their ability to adapt, among other things. This means that they can ideally adapt to changes in the market, for example trends, and design their range accordingly.

Communicate with everyone and everyone

As simple as it sounds: (almost) every conversation can help you! Therefore, you should never prematurely exclude someone as a conversation partner. After all, this could also be a potential customer who can tell you in a conversation what he expects from your product.

Good financial planning is essential

Even the very best idea not only needs a motivated entrepreneur, but also a corresponding financial cushion. It is up to you whether you have saved this up or rely on a loan. Of course, the amount of the budget required also depends on your particular business idea.

Meanings of Entrepreneur Part I

Meanings of Entrepreneur Part I

The term “entrepreneur” is being used more and more frequently. The name comes from French and means – freely translated – something like “company” or “entrepreneur”. Strictly speaking, however, there are also differences between a classic entrepreneur and an entrepreneur. In addition, in contrast to the typical manager, the entrepreneur is not employed, but the founder of a company himself.

What is an entrepreneur?

In summary, it is in an entrepreneur is an entrepreneur who deals with the founding of his own company independently made and according to their own responsibility is. It would therefore be wrong to see an entrepreneur as just a person who is trying (or has succeeded) in realizing his or her own idea. According to POLYHOBBIES.COM, a classic entrepreneur is not only characterized by his own company or his independence, but also by his special character and willpower.

Or to put it another way: when it comes to the question “Entrepreneur or not?” The “total package” decides. A special characteristic here is, for example, the will and the ability to reinvent your own brand again and again and thus stand out from the competition.

The entrepreneur – a colorful personality?

Many employees see the classic entrepreneur as a colorful personality who has not only managed to achieve their goals, but also enjoys other advantages, such as free time management and above-average earnings. But how realistic is this picture really? Reality shows: all the advantages of being an entrepreneur are also faced with major challenges.

A good entrepreneur must, among other things, go through:

  • his assertiveness
  • his courage
  • his willingness to work longer (and on weekends) if necessary
  • the ability to innovate

to remain successful in the long run. This is why many entrepreneurs find it difficult to go on vacation, especially in the early stages. Because: they have the feeling that they have to be continuously available. To escape this “vicious circle”, you need reliable employees who are able to represent the entrepreneur in his absence.

Therefore, no matter how dazzling existence as an entrepreneur may seem – behind the facade there is a lot of work, a lot of courage and certainly one or the other defeat.

The term – what does “entrepreneur” mean?

“Entrepreneur” is a French term made up of the two words “entre” and “prendre”. Freely translated from this results in the German word “undertake”.

Entrepreneurship as a process?

Even the most successful entrepreneurs started comparatively small at some point. Due to the fact that it not only takes a lot of effort but also patience, many self-employed people give up prematurely on the way to their “big goal” and opt for the classic permanent position again . In order to ultimately become an entrepreneur, however, it is important to go through exactly this process. It is part of enduring crises and not giving up.

During this development, it is not uncommon for the very character traits that are so important for an entrepreneur to become even more pronounced “by the way”. The result: a member of the economy who was not only brave enough to face resistance, but also to overcome it successfully.

Entrepreneurship as a management approach

However, parts of the entrepreneurial character can also be used to increase the productivity of an employee in a company. Employees who can identify themselves even better with a brand, for example, often work more efficiently and show more commitment.

These three things drive an entrepreneur

Of course, it is always important for a successful entrepreneur to drive yourself. But what is it actually that can inspire a classic entrepreneur to always give his best? Even if there can of course be differences, it is usually the same factors that are stated when asked about motivation.

  • Self-realization

Hardly any other area offers the opportunity to realize oneself as clearly as entrepreneurship. It is seldom easier to implement your own ideas and try them out independently.

  • The money

Entrepreneurs who don’t rely on passive income know that if they don’t work, they won’t make any money. Conversely, however, this means that income can “easily” be increased if more work is done. The willingness to work on weekends and at rather unusual times is therefore often higher here.

  • The success

A classic entrepreneur can usually identify better with his company than a full-time employee. The success that is based on your own ideas and work is often much more valuable here.

When is an entrepreneur an entrepreneur?

Basically, there is no specific point in time when the self-employed are no longer referred to as “self-employed” but as entrepreneurs. Rather, as already mentioned above, this is a process. Accordingly, there is much more to becoming an entrepreneur than registering your own brand or making your own decisions.

This particular professional group is characterized, among other things, by:

  • the famous “staying power” or perseverance
  • courage
  • a perspective that goes beyond the box
  • entrepreneurial thinking
  • innovative ideas

and ultimately through success. Many entrepreneurs have now made it into the tabloids and are therefore not only successful, but also well-known.

Funding from the federal and state governments

Entrepreneurs have the opportunity to take advantage of various federal and state funding . The chance of receiving appropriate funding here is particularly good if a company applies with an individual and correspondingly innovative model. Many entrepreneurs who receive appropriate support come directly from the university and have participated in various support programs from start-up centers here in the past. Accordingly, it is always worthwhile to find out more about your options.

Entrepreneur 1

Meanings of Claims

Meanings of Claims

When a claim is spoken of, then what is meant is a creditor’s claim to a performance by the debtor. This can be a cash benefit or another benefit.
A claim by an entrepreneur (creditor) is a claim against his supplier or customer (debtor) in the form of money, services or goods. The opposite of the requirement is the obligation.

The characteristics of claims

Accounts receivable primarily consist of financial claims, for example from a delivery of goods. However, if the consideration is not provided immediately, for example the amount is not paid cash on delivery, then there is a claim.

An example:

The company Weise & Weise delivered goods worth 30,000 euros to Mueller & Co. on July 1st, 2016. But Mueller & Co. will not settle the bill until July 20th, and Weise & Weise has a claim against Mueller & Co. up to this point.

The claims on the balance sheet

According to HOWSMB.COM, the receivables are posted and managed in the balance sheet on the assets side under the item current assets as “Receivables and other assets”. According to Section 266 of the German Commercial Code (HGB), they are divided into the following components:

  • Accounts receivable from deliveries and services: If a claim arises from a delivery or several deliveries or services against the customer, then this is referred to as a receivable from deliveries and services.
  • Receivables from affiliated companies: These receivables arise from business relationships between parent companies and subsidiaries.
  • The claims against companies in which there is a participation relationship: These are claims from claims against companies against which the company concerned holds shares, for example as the general partner of a GmbH.
  • Other assets: This item includes all assets that do not fall under one of the other three previous claims. This can include, for example, claims against the tax office, deposits or advances to employees.

The valuation of claims

All trade accounts receivable must be valued at the end of the financial year. This is done according to the so-called creditworthiness principle, according to the following categories:

  • The impeccable demands

These are claims that are expected to be received in full. Therefore, these receivables must be stated with the total gross amount (nominal amount).

  • The dubious claims

In the case of these claims, it is uncertain whether the payment will be received at the end of the year. For example, the debtor may have become insolvent or fail to pay the amount despite several reminders. These receivables are then posted to a separate “Doubtful Receivables” account so that a better overview is created.

  • The bad debts

If at the end of the year it can be expected that the claim will no longer be settled, then it is considered an uncollectible claim. A failed foreclosure can be cited as an example. These receivables can be written off in full and then, as part of a sales tax correction, the sales tax can also be reclaimed from the tax office.

The deferral of a claim

A deferral is an agreement between the two contracting parties, with which the due date of the claim is postponed beyond its due date. Despite the deferral, the debtor remains entitled to meet the claim early. Admittedly, the deferral of claims is not standardized by law, but the legislature has clearly regulated the consequences in the law.
In accordance with Section 205 of the German Civil Code (BGB), the limitation period for the claim is suspended, and this means that the limitation period does not begin to run. The deferral is an objection in the legal sense. The verbal agreement between the creditor and the debtor is sufficient for a deferral, because there are no formal requirements stipulated by the legislator.
In the context of tax law, the deferral of claims is an administrative act and this can be granted if the collection of the claim would mean considerable hardship for the debtor and the claim is not endangered by the deferral.

When is a claim time-barred?

For an entrepreneur, a payment default can quickly mean ruin and therefore every effort should be made to assert the claim in good time. However, since the shortened limitation periods in force in 2001, entrepreneurs have had to react quickly. A decisive sentence is set out in Section 214 (1) of the German Civil Code (BGB), and it applies here that a claim no longer has to be paid after the statute of limitations has expired. In plain language, that means that the entrepreneur can continue to demand his outstanding invoice from the customer. But the latter can enforce the statute of limitations via the objection and that means that in this case he no longer has to pay and the entrepreneur can no longer enforce his claim, which still exists, in court. There is only one thing left here: hope!

Business Claims

Meanings of Right Price Part III

Meanings of Right Price Part III

4. Which pricing strategy for the price calculation?

Different pricing strategies can be used for price calculation for different products. The price is classified in a lower, middle or upper price range. There are the following strategies:

High price strategy

The high price strategy will be used for products that have particular performance and / or quality advantages and a very good image on the market. The prices of the products are well above the average price on the market. Premium brands such as Chanel and Tesla use this strategy.

Medium price strategy

Products that are of average quality use this pricing strategy. This is often found with private label or non-exclusive branded items. It is often difficult for suppliers of these products because they are between the low-price and high-price suppliers. And so they are on the one hand under strong price pressure and on the other hand under high quality pressure.

Low price strategy

If the products only have the lowest quality level because the company wants to reduce and optimize costs as much as possible, the price is well below the market average. This is possible because large quantities of the product are produced and sold in order to secure market shares. In these cases, customers are particularly price-sensitive. If another company sells a similar product at a lower price, customers will buy from that company. An example of this are discounters such as Lidl or Kik.

Price differentiation

If a product is offered at different prices – for example through discounts at certain times of the day or season – we speak of price differentiation. The price can also be varied for different groups of people (corporate or end customers), regions or in relation to the sales volume. The price for a subscription can be cheaper than if an individual order is placed every month.

5. Allow for discounts, rebates and discounts

According to HEALTHKNOWING.COM, price reductions are used for price differentiation. This includes discounts , bonuses and cash discounts .

The discount can be deducted directly from the sales price as an absolute amount or percentage and must also be taken into account as this in the price calculation. The discount can be granted for high purchase quantities, but also as a first-time discount to win new customers. Typically, the amount of the discount can be very different – from 5 percent to 50 percent.

The customer only receives the bonus retrospectively, for example when he has made a certain turnover and receives a loyalty bonus for it.

If the invoice is paid within a certain payment period, for example 14 days, the customer can be granted a cash discount. Usually this is 2 or 3 percent.

Important: Discounts, bonuses and cash discounts must be taken into account when calculating the price. If the discounts are not factored in, this would reduce the profit.

6. How to calculate the right price

Using our example from Karl, we want to show you how you can now calculate the product price.

Direct material costs € 230.00
+ material
overheads € 80.00 = material costs € 310.00
+ production costs € 90.00
+ production
overheads € 35.00 = production costs € 435.00
+ administration overheads € 50.00
+ sales overheads € 35.00
= cost 520 €
.00 + profit (50% surcharge) € 260.00
= subtotal (cash sale price) € 780.00
+ discount (2% surcharge) € 15.60
= subtotal (target sales price) € 795.60
+ discount (10% surcharge) €
79.56 = total (list sales price net) € 875.16

So we get a net sales price per shelf of 875.16 euros from the price calculation. The sales tax must be added to the sales price.

7. After the calculation is before the calculation

Even after you have calculated the price of your product, you should check that price regularly. In this way you can see whether the calculated price is still correct or whether you need to adjust it. To do this, ask yourself the following questions:

  • Have you changed the prime costs?
  • Have you been able to reduce your costs? Or did they go up?
  • Have you taken all costs into account?
  • Have you hired new staff?
  • Did you sell more or less than planned?
  • Do you need to lower or increase the discounts?

All of these questions will help you to keep checking your pricing and, if necessary, to change the price.

Right Price 3

Meanings of Right Price Part II

Meanings of Right Price Part II

For Karl’s target group, this means: Assuming 20 percent of male Germans buy a new shelf once a year, of which only 15 percent are willing to spend more on a new shelf. Another 22 percent of them order their furniture online. That is the equivalent of 1,230,000 inhabitants. One percent of them would be Karl’s customers, i.e. 2,706. These order once a year. That means, that could be 225 potential customers for Karl’s shelf per month.

From this number it can be derived which price has to be calculated for the shelf and which income can be expected. This is of course only very roughly calculated. But is going in the right direction.

2. What are the real costs?

According to GRADPHYSICS.COM, the next step in the price calculation is to determine the actual costs. Because these should of course be covered by the sales price.

To do this, all costs that arise from the manufacture and marketing of the product or service must be determined.

These costs result in the company’s prime costs. These usually consist of the following cost items:

  • Material costs

Raw and auxiliary materials, operating materials

  • Manufacturing costs

Machines, production (manufacturing wages and energy costs), production facility (space costs), construction and

  • Development costs

R&D costs (research and development)
personnel, property, plant and equipment, resources for research, product development and experimental development

  • Service costs

Consulting costs, costs for transport or lease, maintenance and service costs

  • Administration and distribution costs

Salaries for sales, marketing, customer service, accounting, human resources, rent or lease, depreciation, travel costs, postage costs

The costs that you take into account in the price calculation are usually divided into variable and fixed costs. While variable costs depend on the quantity or service produced, fixed costs also arise without something being produced. For example salaries, insurance or rent.

And how are the prime costs determined?

The prime costs are calculated per piece and result from:

Direct material costs
+ material costs
= material costs
+ direct labor
+ manufacturing overhead
+ development costs
= manufacturing costs (materials and manufacturing costs)
+ administrative expenses
+ selling expenses
= cost

The individual costs can be added directly to the product – material costs for the shelf of 230 euros. While the overhead costs are allocated proportionally (as a percentage) of the quantity produced – the office rent of 500 euros per month.

How do I calculate the cost of services?

If you are a freelancer and do not sell products, but rather your working hours – for example as a coach or consultant – you have to use a different price calculation. Because in this case the available working hours are the basis of your price calculation.

First, all costs are determined: from personnel costs to insurance to office rent. Do not forget to include the amounts for social security that would otherwise be borne by the employer.

Then determine the available working hours. Take into account the number of working days per year. But also possible vacation and sick days. Because on these days you cannot work and therefore do not earn any money.

You should also take into account the time required for office organization, accounting, customer acquisition and sales in the price calculation. Because you cannot bill anyone for these times either. And you have to balance these times with a reasonable hourly rate. Therefore, you cannot expect a workload of 100 percent. Rather, 60 percent is realistic – and good.

Also include a profit in your hourly rate. This provides you with a cushion in the event that times come with fewer orders or you want to make investments.

Note: Partnerships, a GbR or OHG, and sole proprietorships only consider their salary in the profit calculation. Because their work performance and their remuneration are compensated by the profit. In this case, the payout is not viewed as an expense, but as a private withdrawal.

In order to still take the salary into account in the price calculation, you can include the imputed entrepreneur’s wages as additional costs. This indicates the difference that results from the actual income and the fictitious shareholder salary customary in the market.

As the founder of a corporation, however, your salary counts directly towards costs. Because you are considered an employee of the company who regularly receives a salary. The salary is part of the personnel costs and is therefore profit-reducing. And is therefore calculated at cost.

3. Determine the profit margin

The price should of course not only cover the costs, but ideally also a profit. For this, the profit margin must be taken into account in the price calculation. This should also cover any fluctuations in demand or idle times. Or also to enable investments for the company.

The profit margin – or the profit surcharge – is also the difference between the list price and the cost price. The range can vary greatly depending on the industry. Profit margins of 100 percent or more are quite common in the manufacture of furniture and clothing. In the case of books, on the other hand, it is 35 to 55 percent.

Right Price 2

Meanings of Right Price Part I

Meanings of Right Price Part I

What is the right price to ask for my products? How do I find the right price and what costs do I have to take into account? According to GRADINMATH.COM, price calculation can be a challenge for founders and self-employed people. Much has to be considered and included in the calculation. Because the price should not only cover the costs, but also generate a profit and, above all, be competitive. We explain to you how to calculate the right price.

1. Target group, market and competition analysis

Your customers come first. Because they should of course buy your product. And you will only do that if the price is “right” for you. Therefore it is important to get to know your customers. A target group analysis for the price calculation is essential for this.

Which your target group is depends on the corporate goals that you defined in the planning of your self-employment.

The first step is to look at the “obvious” characteristics to find out who is buying your product and what makes your potential customers different.

  • Demographic characteristics

Gender, age, marital status, place of residence

  • Socio-economic characteristics

Profession, salary / income, qualification / level of education

  • Psychographic characteristics

Religion, attitudes, preferences, interests, lifestyle, buying behavior, brand loyalty, loyalty, preferences, wishes, needs and problems of the target group, communication behavior

If your customers are more corporate customers, other characteristics are important to you:

  • Organizational characteristics

Company size, company age, location

  • Economic characteristics

Sales, liquidity, profit

  • Buying behavior of the company

Company principles, supplier loyalty, time of purchase

  • Personal characteristics of the decision-makers in the company

Innovative, communication behavior, attitudes

Once you have an initial picture of your target group, the next step is to analyze the purchasing behavior and price sensitivity of the target group for the price calculation.

  • What price can your target group afford?

Disposable income plays an important role in this

  • What price does the target group want to afford?

Even if your target group has a certain income, that does not mean that they are willing to pay a high price for your products. On the contrary. Perhaps you are offering a product that is not particularly important for this target group and therefore only wants to pay a low price.

From this you can deduce whether your target group is willing to pay a little more for your product because, for example, quality is particularly important to them.

In order to better explain the result of the analysis, we assume that we are supporting the founder Karl in calculating the price. He has developed a shelving system that he would like to sell online. The target group for him is:

  • Men between 35 and 50 years of age living in a relationship who live in the city
  • Disposable income is slightly above average
    modern lifestyle
  • It is important to have a beautiful and “trendy” furnished apartment
  • And we like to spend a little more money on special furniture.
  • From this it can be deduced that the target group values ​​particularly good quality, for which they like to spend one or two more euros.

Sources for market research

Are you now wondering how to get hold of this information? There are two ways to do this. On the one hand the quantitative and on the other hand the qualitative research. Of course, you can also combine this research.

Qualitative market research can include the following sources:

  • Web analytics
  • Public studies / industry studies (Federal Statistical Office, Statista, Chamber of Industry and Commerce)
  • Market research institutes (Society for Consumer Research, IFH Cologne, Sinus Institute)
  • Own market research
  • Auditors
  • Consulting firms
  • Banks

Quantitative market research can

  • Customer interviews or surveys
  • Ethnographic research (Google Analytics, Facebook Insights)
  • Industry associations
  • Market studies ( Sinus-Milieus )
  • IHK
  • Own market research


Analysis of competitors

You can also analyze your competitors on this basis. Because the competition also plays an important role in price calculation.

Find out who your direct and indirect competitors are, what products they are offering and what price they are charging for them. Also note the price-performance ratio. In other words, what additional services do your competitors offer? Maybe a free delivery service, round-the-clock support?

This can lead to the following questions:

  • What are the strengths, what are the weaknesses?
  • What is the unique selling point?
  • What does he do better than himself?
  • What additional services does the competition offer?
  • What is the target audience?
  • What price does the competition ask?
  • What is the turnover of the competition?
  • What are your plans for the future?

When calculating prices, it often happens that the market demand is overly optimistic. Since one assumes a high demand and sales volume, more material is bought and more is produced. If the quantities produced are not sold, the calculated price does not cover the costs. Because the actual income does not match the calculated and probably does not even cover the expenses.

In order to be able to assess the real demand for the price calculation, founders can consult industry figures and reports. The actual market potential can be derived from this.

Right Price 1

Meaning of Racial Prejudice

Meaning of Racial Prejudice

The racial prejudice is based on the existence of physical and socio-cultural differences, supposedly, make some better than others. People judge others because of their color, or rather, race .


This alleged superiority is sustained in the perpetuation of racial myths and false truths that are hidden in the form of stereotype , a type of image that we freeze in our memory and start to consider it as reality.

By incorporating biological characteristics, the racist stereotype is dressed in scientific clothing, a practice that became common in the 19th century, taking advantage of Charles Darwin’s discoveries about the mechanisms of species evolution.

The Count of Gobineau, through “ scientific racism ” stated that racial differences between peoples (white, yellow and black) were responsible for their economic, technological and social differences, making white people superior to other races, which justified their dominance about the latter.

Subsequently, studies on human genetics point to the existence of minimal differences between the races , which have a common ancestor, since we are all part of the Homo sapiens group.

In fact, when we talk about prejudice, we are talking about intolerance , a tendency to disrespectfully treat everything that we consider different or distant from what we call normal.

Racial prejudice in Brazil

In the past, it was common to see black Africans accompanied by beautiful Nordic blondes or from other parts of Europe. There was not the slightest prejudice between these couples or in relation to them. For Brazilians, however, it was unprecedented and scandalous; jokes were made implying that the success of blacks was due to the fact that they were very gifted anatomically for sex. A typical prejudiced view, which sought to disqualify the Negro and which hid, at times, a good dose of envy.

It is impossible to discuss racial prejudice in Brazil without associating it with the historical process of building Brazilian society , marked by a slave past linked to the mercantilist needs of its metropolis, Portugal.

The slavery in Brazil promoted a process of dehumanization , in which the slave was seen by the owner as a work tool, a product, something.

This dehumanization was strengthened with the religious justifications given for enslavement, when part of the Church claimed that the Negro was stripped of his soul.

The prejudice against the black was further reinforced by the historical reality , since, with the abolition of slavery in 1888, the black was not inserted in the wage labor market, nor in society, remaining confined in ghettos and peripheral areas.

The struggle of black people for social recognition and the full exercise of their citizenship intensified at the beginning of the republican period, which can be seen in movements such as the Vaccine Revolt , in Rio de Janeiro, which had the predominant participation of a black population and mestizo harmed by the process of urban revitalization of the capital.

Currently, it can be said that the black movement has been strengthening and articulating itself in order to combat racial prejudice and strengthen black identity , which, more than a condition of color or race, should be understood as a cultural issue, since it the one who claims to be black is inheriting the history of this group that was forced to move to Brazil to serve as labor on the large property.

However, the black movement still faces great challenges, as evidenced by the IBGE data from 2017, which reveals the existence of a discriminatory society , which differentiates the quality and remuneration of work by the color of the person. According to Pnad data, whites earn an average of R $ 1240.00 more than blacks

In Brazil, racial prejudice is fought with laws . Only education will be able to clarify to everyone, especially to whites, what it represented for the black race what was imposed on them by the slave trade. The Church believed itself with the right to catechize those who knew nothing about the Catholic religion. The Government did nothing, after Abolition, to give former slaves the conditions to study and earn a place in society.

Racial Prejudice

Meanings of Inventory

Meanings of Inventory

The result of an inventory is the inventory and this is divided into the following items, for example:

  • Assets
  • Net worth
  • Debt

In the inventory, the assets are divided into fixed assets and current assets according to their liquidity . The term liquidity is understood as how quickly the asset can be converted back into money.

According to GRADCHEM.COM, the net worth – or the equity – is calculated from the difference between the assets and debts.

Carrying out the inventory

In the inventory, a distinction must be made between the physical inventory and the book inventory. In the physical inventory, the physical inventory, such as stocks, finished and semi-finished goods, machines, raw materials, etc. – everything that is tangible is recorded. This inventory involves measuring, estimating, counting and weighing. The results are entered in inventory lists, whereby the condition is also taken into account. The book inventory. It includes the debts, the credit, the liabilities to suppliers and financiers as well as all receivables and these results are also recorded in the accounting records.
An inventory is carried out at the start of business activity and then mandatory once a year and also when the company is closed. A wide variety of application methods are used:

  • Key date inventory
  • Time-shifted / postponed inventory (a shift of up to 3 months)
  • Inventory sampling
  • Permanent inventory
  • Book inventory
  • Physical inventory

The inventory and the registration

The entire inventory is shown as the result of the inventory, both tangible and non-representational values ​​and liabilities. The inventory is shown in a directory that is created during the inventory and includes:

  • All company assets
  • The company’s debts are arranged according to their due date.
  • The company’s net worth / equity

The inventory thus includes all kinds of tangible assets and cash in the company, as well as the company’s financial situation and liquidity. It is important that the recording must be presented completely, it must also be free of errors and correspond to the facts in all points.

The individual items in the inventory

  • The asset and debt positions

Assets and debts can in turn be divided into subordinate categories, with assets being broken down into fixed assets and current assets:

Fixed assets = land, factory buildings, vehicle fleet

Current assets = cash in hand, account balances, receivables

Fixed assets

This consists of items belonging to the company that are not intended for sale and are used exclusively for the production or service process.

  • The current assets

This consists of the assets that are “in circulation”, that is, belong or belong to the company only for a short period of time and are then ultimately implemented.

  • The debts

A similar breakdown needs to be made for inventory debt. The debts are broken down into.

  • Long-term debt (e.g. mortgage debt)
  • Short-term debts (e.g. trade payables)

The inventory and the balance sheet

As already explained, the individual tangible assets are listed in the inventory, which are then summarized in the balance sheet as balance sheet items. For example, machines are listed individually in the inventory with their respective value and number of pieces. These are then assigned to the technical systems and machines account in the balance sheet. The information in the balance sheet, however, relates exclusively to the value of the machines and does not indicate any quantities. The inventory is a list that is recorded in account form during the balance sheet. If there are deviations between the target and the actual stock in the inventory, the target stock must be corrected. These differences then flow into the profit and loss statement in full.

The creation of the inventory on the key date

As a rule, the key date inventory is on December 31. of a calendar year. The stocks must be recorded quantitatively for this inventory and recorded in lists. A deferred inventory may only take place within a period of 10 days before or after the reference date. The inflows and outflows to be recorded between the recording date and the reference date must be updated or recalculated in terms of quantity and value. The value of the goods is calculated on the basis of the acquisition costs and a devaluation for damaged current assets is permitted. But increases in value are not allowed according to the lowest value principle.

The most important things at a glance

  • The compilation of the inventory is the duty of every businessman
  • The inventory must be taken at the beginning, at the takeover or at the end of the commercial operation.
  • In addition, the inventory must be taken at least once a year.
  • The inventory must capture all debts and assets.
  • The inventory must be kept for 10 years


Meanings of Assets and Liabilities

Meanings of Assets and Liabilities

Fixed assets, which also include current assets and prepaid expenses, are the most important assets. In the case of a balance sheet , the assets are the page on which the use of funds is shown.
Note: The value of all assets must always correspond to the value of all liabilities. This sum is called the balance sheet total.

The most important items of the assets are shown in HGB § 266 II:

  • Fixed assets: e.g. B. Buildings, machines and operating and office equipment – but also intangible things such as software and licenses as well as financial assets
  • Current assets: cash on hand (cash or on the account), raw materials, other stocks – but also accounts receivable from customers
  • Prepaid expenses: Payments for which consideration is received later, such as advance rent payments.

It should be noted at this point that it is necessary to activate additional items in the balance sheet in certain cases. But for a first explanation it is enough to remember that the current assets and the fixed assets represent the basic components of the assets!

What is a liability?

According to FOODANDDRINKJOURNAL.COM, the liabilities, which are equity and debt , are listed on the right-hand side of the balance sheet. The source of the funds is shown on the passive side (liabilities). The value of all assets is called the balance sheet total and always corresponds to the value of all assets!

Section 266 II of the German Commercial Code (HGB) lists all important items in the liabilities, which basically consist of equity and borrowed capital.

  • Equity: This is the capital that belongs to the entrepreneur. This usually consists of two parts: The capital that has been paid into the company by the owner (equity). The legislature also fundamentally differentiates between subscribed capital and capital reserves – although in the end they are very similar. However, the retained earnings are to be distinguished, because these were generated and not paid out to the entrepreneur.
  • Provisions: These are liabilities that the company has, for example towards the tax office, but the amount or the date of payment are not yet known. In addition, liabilities that are not yet secure, such as a fine in court proceedings, are also referred to as provisions.
  • Liabilities: Colloquially, these are debts, such as loans from banks or unpaid bills.

Note: In very specific special cases, other items can also be booked in the liabilities. But in principle, provisions, liabilities and equity are the basic components of the liabilities side (liabilities).

Assets and liabilities on a balance sheet

The balance sheet , which is part of the annual financial statements of every businessman, is a comparison of assets and liabilities according to Section 242 (1) of the German Commercial Code (HGB), which must always be created in the form of an account on the balance sheet date .
The assets, i.e. the assets, are listed on the left-hand side of the balance sheet and the liabilities, i.e. the liabilities, provisions and equity on the right-hand side. If a balance sheet is drawn up, the so-called balance sheet equation applies to it: This means that the final total (balance sheet total) of assets and liabilities must always be the same.

Note: The term balance sheet is often used as a synonym for the annual financial statements, which in addition to the balance sheet at least also include the profit and loss account. If the term balance sheet analysis, balance sheet review or balance sheet falsification is used, then the annual financial statement audit, the annual financial statement analysis etc. is usually meant.
The bottom line is that the balance sheet total is formed for assets and liabilities and this represents one of the size criteria i. S. d. 267 HGB. The aim of the balance sheet is to obtain an overview of the net assets and the debt coverage potential by comparing assets and liabilities at a certain point in time, ie the balance sheet date.

The balance equation

A balanced balance sheet equation applies to all balance sheets and that means that the assets (assets) and the capital (liabilities) in the final total must always be the same! Equity is the difference between assets and liabilities as a pure accounting item. The term balance sheet is also used synonymously for the annual financial statements, which, in addition to the balance sheet, also require a profit and loss account. The two together then result in the annual financial statements, possibly also expanded with a management report or an appendix.

Assets and Liabilities

Meanings of Accounts Receivable

Meanings of Accounts Receivable

Accounts receivable is the management of accounts receivable from customers. A debtor is nothing more than a debtor. Accounts receivable in a company is a part of the bookkeeping that deals with managing accounts receivable from customers.
This means that accounts receivable is the opposite of accounts payable. This processes all processes related to the company’s suppliers and service providers.

Note: Vendors are suppliers to the company. Accounts receivable are your customers to whom you deliver or for whom you have rendered services and have issued invoices for them.

The term accounts receivable: what exactly is it?

According to ELECTRONICSENCYCLOPEDIA.COM, accounts receivable accounting is an important field of activity in a company’s financial accounting. This area deals with the recording and administration of transactions with customers or business partners, who in this case take on the role of the debtor, that is, the debtor . Although the customer is referred to as a debtor in the business world, he still enjoys and is viewed as a customer.

The recording of the outstanding amounts to your company is far more than just a purely documentary task. Because the resulting information is also of great importance for the further planning of your company. In terms of your own liquidity and further business relationships with the respective debtor.

Accounts receivable is divided into two major areas of responsibility:

  • The receivables management
  • The information management

The sub-area of ​​receivables management

Receivables management includes all measures that a company can take in connection with open receivables (invoices). The central element is the dunning process. It is mostly the accounts receivable department who write and send the reminders. If the first reminder is followed by the second reminder and this is already followed by a threat of termination, whereupon a final third reminder is issued and the debtor does not react, then the appropriate measures are either taken in cooperation with a lawyer or the incident is then passed on to a debt collection agency. If there is still no response from the customer, i.e. an out-of-court settlement fails, the accounts receivable department will take appropriate steps. This can range from a payment order to an enforcement order to a court hearing.

The information management sub-area

There are two types of information in information management. On the one hand, there is information about the outstanding and expected payments from customers (debtors) to your company. On the other hand, there is information about the payment history of the relevant customer.
The information about the outstanding payments is important for your company in that it is important for the liquidity of your company and influences your long-term investment planning. It is important that you are always well informed about the exact financial situation in order to be able to make any operational or even strategic decisions.

The information about your customers can be very important, especially for future business, because the current payment history of a customer allows conclusions to be drawn about his general payment behavior. Furthermore, it is even possible for accounts receivable in some cases to draw conclusions about the general financial situation of the customer. If, for example, it becomes apparent that one of your debtors is at risk of filing for bankruptcy, you can still react in good time and stop deliveries. This may help you protect your own business from financial problems before the bills add up.

The debtor risk & scoring

As already mentioned, not all customers pay their bills on time and some just don’t pay at all. The accounts receivable department must also deal with this so-called debtor risk and thus assess the risk of payment options as precisely as possible. With so-called scoring, solvency and the individual risk of default are assessed as precisely as possible. With this you can achieve a certain minimization of the payment default. In some cases, you can also take into account the customer’s creditworthiness data, which comes from external sources.
Usually this scoring takes place in connection with the administration of the customer accounts. However, postings to a one-time or one-time account, as in accounts payable, are not common in accounts receivable. The only exception here is the so-called “clarification account”, to which incoming payments are posted that cannot be immediately assigned with certainty.

Accounts Receivable

Meanings of Own Receipt

Meanings of Own Receipt

What is a self-receipt?

In the bookkeeping, the iron principle “No posting without receipt” applies. No commercial booking without an invoice. In order to ensure that the bookkeeping and the tax office run smoothly, receipts and invoices should always be kept carefully. Invoice documents are generally divided into internal documents and external documents. Internal documents are created within the company for accounting , which can typically be payrolls or material withdrawal slips. These receipts serve the traceability of internal business processes and depict business issues in the company. Because no external economic operator has created these documents, these are already own documents. In general, your own receipts serve as a substitute for an invoice or receipt. In the event that there are no receipts for a business transaction, you must therefore create your own receipts and submit them to the tax office.

According to DICTIONARYFORALL.COM, external documents document ongoing financial and goods transactions of the company, which can be incoming and outgoing invoices or bank statements. The receipts and receipts serve as evidence of operating expenses and operating income. External documents, also known as external documents, enter the company from outside. They are created by suppliers and service providers such as consultants. If such documents are not available or if they are lost, a separate document can be created as a replacement.

In most cases, self-receipts are issued by the entrepreneur himself or by senior executives who are authorized to do so. Own receipts serve as a substitute for invoices or receipts in front of the tax office. They document business transactions that have actually taken place and identify them as income or expenditure during audits by the tax authorities, auditors or internal auditors. In principle, however, each receipt must be kept and a personal receipt must be created as soon as possible.

What to do if receipts are missing?

The lack of original receipts can have various causes. The payee may have forgotten to issue a receipt or may not have issued a receipt for receiving a tip. Original receipts may have been lost or destroyed. If no third party or company is involved in the transaction, a receipt is not always issued; in this case, a personal receipt must be prepared to document the business process.
For unscheduled depreciation such as spoilage, inventory reduction or theft, it is necessary to create a personal receipt. After all, no thief leaves a receipt. For the settlement of travel expenses or additional meal expenses (read: expenses) There is not always a receipt for an entrepreneur or employee. Since hotel bills often disappear or are simply issued incorrectly, a personal receipt is often required as a replacement for the missing receipt. If an individual entrepreneur or partner in the company makes private withdrawals in the form of money or assets, a personal receipt is also required. If he makes a private contribution, a personal receipt must also be written for it.

This is important when creating your own receipts

Entrepreneurs should not create collective receipts. A separate receipt is required for each individual amount. In tax law, professional and operational expenses must be proven. A deduction – and thus a reduction in the tax burden – may not be made if there are no valid invoices or receipts. This obligation to provide evidence does not apply to flat rates. If there is no receipt for a business transaction or the invoice has been lost, a separate receipt must be created as a replacement.

In order for a personal receipt to be recognized by the tax office, the expenses must be operationally or professionally necessary. In addition, the amount of the expenditure must be credible and plausible. Ultimately, the decision as to whether a self-receipt is recognized as part of the tax return or not lies with the responsible tax officer. If necessary, you can explain the facts to him in more detail during an examination. In any case, the self-receipt is only an emergency solution in the event of a lost receipt. However, self-receipts are common for small expenses that arise in daily business life. Own receipts can be issued for the use of coin-operated machines (e.g. for parking fees or entrance fees) or for the payment of tips.

This information is required on your own receipt

The following information must be included on the self-generated invoice:

  • Name and full address of the payee
  • Date of expenditure and creation (if different)
  • Type of expenditure
  • Costs – the total price or the individual price per piece can be specified here;
    the VAT rate must also be specified
  • Proof of the amount of the receipt – if possible, a price list should be attached to your own receipt
  • Reason for self-receipt, e.g. loss or theft of an original receipt, unacknowledged tip or use of a machine
  • Hand signature of the exhibitor.

If the self-receipt for the payment of tips was created, the reason for the visit, the names of the people and the company must be recorded on the self-created receipt. A personal receipt can be handwritten and informally created, but it is important that it contains all of the above information, otherwise questions from the tax office regarding the receipt may arise. The exhibitor confirms the correctness of the information on the invoice or receipt with his signature. There are also many self-receipt templates that you can download for free.

Does the own receipt apply for the input tax deduction?

Input tax cannot be claimed from the tax office on your own receipts , because the formal requirements for input tax deduction according to § 14 and § 15 of the Sales Tax Act are not met. A proper invoice is essential for the input tax deduction. The reason is simple and obvious: it is not clear on the personal receipt whether the payee was a small business owner or even a private person. Strictly speaking, this receipt does not even show a payment that has actually been made.
The statutory retention period of ten years applies to your own receipt, just as it does to other receipts. These receipts should therefore be treated just as thoroughly according to the principles of proper accounting as external invoices.


As a rule, your own receipts for small amounts of up to € 150 gross are unproblematic. This applies in particular to payments made via an account. The account statement can be used as a secondary receipt for this. In general, there is no maximum limit for personal receipts set by the legislator. However, higher sums are questioned by the tax office, so taxpayers should seek replacement receipts to record the loss of the original receipt. This not only circumvents conflicts with the tax office, but also provides additional evidence for the warranty case.

Own Receipt

Meanings of Secondary Business

Meanings of Secondary Business

When registering a business, a general distinction is made between main business and secondary business. The only ones excluded from this distinction are freelancers. These are not subject to the business regulations and therefore do not have to register with the business office . The line between main and secondary business is drawn by the law and the social insurance agency of the GKV (statutory health insurance funds). For secondary business, synonyms such as secondary employment, small businesses are often used.

What is a secondary business?

According to DEFINITIONEXPLORER.COM, a secondary business is a registered business that is not, however, carried out full-time or full-time. Especially the social insurance agency (the GKV) draws, like the legislator, the limit of 20 working hours per week between the business and the main occupation. It should be mentioned that the term “secondary business” does not provide any information about the legal form of the company. In principle, every business can be carried out by a small business owner as a secondary business, regardless of the type of company. There are also no differences when registering with the business office; the registration of the secondary business is identical to that of a main business.

However, employers must be informed about the future or existing business or small business. As a rule, employers have nothing against registering a secondary occupation if the work performance of the employee does not suffer from the additional work. Of course, competition with the secondary business to the employer must also be avoided, because both then usually lead to disputes, which often have to be resolved in court.

Secondary business and health insurance

The start-up of a business is not obliged to take out additional health insurance by opening up an secondary business (even as a small business owner) . As a rule, the founders must continue to be insured through the free family insurance of the statutory health insurance with their secondary businesses. If he receives unemployment benefits or even Hartz 4, he can continue to be insured through the responsible Federal Employment Agency. Whether the small business owner can continue to be insured in the statutory health insurance, the family insurance or through the public carrier, however, decides the respective insurance. This is usually based on the scope of the secondary occupation for the decision.

Does the secondary business have to be registered with the business office?

In general, the secondary business must also be registered with the competent business office. This situation arises from Paragraph 14 of the Industrial Code (GewO), which states that a commercial activity must be registered as soon as it is started. The business registration should not be deliberately delayed and should be done promptly to avoid trouble. The local business office also provides information on deadlines, because it usually has a little leeway. You can find more information on registering a business in Baden-Württemberg on the service page of the Ministry of the Interior, Digitization and Migration.

What is a commercial activity?

This question becomes more difficult because there is no clear definition here. The question that arises is: Is the eBay seller , who only processes a few transactions per month, already a commercial dealer? Does the carpenter who occasionally does small jobs for friends and acquaintances for a fee have to register a business? This is a broad gray area. However, a commercial activity exists in the following cases:

  • If it is a self-employed activity – i.e. not as an employee
  • The activity is allowed
  • There is an intention to make a profit
  • The activity is designed to last

Thus, both the eBay seller and the carpenter are commercially active, because a) their activity is not prohibited, b) they work independently, c) they work permanently and d) they earn money with it.

How large the scope of the activity is is not relevant. Even if only a few hours are invested in self-employment every month, it is a commercial activity. You are considered a trader if you want to make a profit.

Tax: secondary business, tax office and tax return

Once the business registration is done, the secondary trader should get in touch with the tax office – because sooner or later they will want to take part of the cake – in other words: taxes. The tax return for small business owners will of course also change.

1. The tax registration form

After the business has been registered by the small business owner, the tax office is automatically informed that a business has been registered. As a rule, it immediately sends the founder a so-called “tax registration sheet”. In this, the key data of the company in formation are recorded and the expected income for the current and next year is estimated.

2. Collect and organize receipts throughout the year

All relevant documents and receipts for the tax as well as for the business must always be kept together and organized. For this, the trader should create folders in which he can properly store the incoming and outgoing invoices. This is of course also permitted in digital form. In this way, a late or incorrect tax return can be avoided because you first have to rummage through the chaos or even no longer find important documents for taxes. You should find out exactly what can be deducted as operating expenses in advance. As a small business owner, you can sort out and only keep the documents relevant to your tax return. Incidentally, the tax office has an obligation to provide information to the taxpayer on all questions relating to tax. Of course, this also applies to small businesses and founders. So if you have any questions about your own tax return, you can contact your tax advisor or the responsible tax office.

3. The determination of the income-surplus-account

The profit of the secondary business – and thus the tax to be paid – can easily be determined using an income-surplus calculation . This is a greatly simplified form of profit determination, in which the income and the expenditure are compared according to the principle of actual taxation . A full accounting is usually not required for the tax return in the context of an secondary business. The result of the income statement can then be transferred to the income tax return, which contains the income of the various types of income and reports it to “tax”.

4. The income tax return

It depends on whether the trader is commercially or freelance, which of the following annexes are relevant for the income tax return:

  • Annex S: For income from self-employed work
  • Appendix G: Income from business

In one of the two systems, the profit or loss, which was determined by the income-surplus calculation, is entered. This annex is added to the cover sheet that forms the framework of the tax return. An online tax calculator can be used to calculate how high the individual tax burden will be. Of course, secondary businesses or small businesses can also submit their tax returns online and use the ELSTER procedure.

The secondary business and unemployment

A secondary business can also be registered in times of unemployment. However, this can lead to problems when applying for the start-up grant. Therefore, everyone should first talk to a start-up coach so that the funding from the start-up grant is not endangered.

If a secondary business is registered in unemployment, then some regulations on the scope of work and additional income must also be observed. The weekly working time must not exceed 15 hours. Because: Those who work more no longer count as unemployed and no longer receive any benefits. The additional income as a small business owner may not exceed 165 euros per month. Any income above this limit must be deducted from unemployment benefit.

Secondary Business

Meanings of Account Assignment

Meanings of Account Assignment

What is account assignment?

In the bookkeeping, you post each business transaction on the basis of receipts on G / L accounts. So that you can submit the accounting for expenses and income to the tax office on a monthly or quarterly basis. In order to document the correctness of postings, all documents of a certain period are assigned to expense and income accounts. Accordingly, this process is called account assignment.

In most companies, manual pre-accounting takes place. Because it relieves the tax advisor of a lot of work. The entrepreneur notes the amounts to be posted as well as the assigned accounts and cost centers on the posting documents. These details define the booking rate . This, on the other hand, forms the basis for the work of the tax advisor.

The account assignment takes place in three stages:

The receipts are recorded and provided with the date and receipt stamp,

Receipts are sorted chronologically

and checked for accuracy.

As a result, the tax advisor records all types of costs and amounts with software. This automatically calculates the tax rate for sales tax and input tax and at the same time creates the sales tax return for the month or quarter.

Pre-accounting to prepare the booking

The company must do the pre-sorting and assignment of the documents itself. They are part of the preparatory bookkeeping. The pre-accounting clarifies which account is addressed in a booking record and accelerates the whole process. It also ensures that processes run smoothly in the company, so that the accounting department only carries out control and the actual booking. When prepaying, you assign all receipts chronologically and each to an account statement. Then you hand them over to the tax advisor or the accounting department. Balance sheets , financial statements and posting account assignments are not part of the preparatory bookkeeping.

Internal and external documents

In accordance with the receipt principle, no posting may be made without receipt. In order for you to post a receipt properly, it needs qualified information about:

Invoice amount


Type and amount of purchase

Purchase date

Signature of the authorized person

The receipt must also contain an account number to which the posting is made. The accounting department numbers receipts consecutively and stores them in an orderly manner for ten years . The documents are differentiated according to the type of document. External documents that were created outside of the company fall into the category of external documents. These can be countersigned bank or postal receipts, for example.

Internal documents are internal receipts incurred within the company, such as sales invoices or payrolls.

According to BESTEDUCATIONSCHOOLS.COM, a third category is called emergency receipts. You only issue these receipts in an emergency as a substitute for external receipts. This can be done, for example, for a taxi ride without a receipt from the taxi driver. Such an emergency receipt contains the same information as the normal external receipt.

The account assignment with chart of accounts

An accountant who assigns documents to documents must follow the company’s chart of accounts. After all, this plan is a directory of all accounts to be posted in the company. The chart of accounts is derived from standardized charts of accounts . These systematically define the accounts required for certain branches of the economy. Depending on the industry, there are special charts of accounts for banks, industrial companies or retailers. As a result, the industrial accounting framework (IKR) applies nationwide to industrial companies . Whereas for trading companies the standard chart of accounts (SKR) applies. This chart of accounts shows various accounts, so that many companies only use a short version. All accounts that are not needed are eliminated.

Simple and compound posting records

The posting record specifies which accounts are addressed in debit and credit. A further distinction is made between simple and compound booking records. The simple booking record addresses one account in debit and credit . With the composite posting record, however, the posting is made on at least one page to two accounts. Compound booking records are created by taking input and sales tax into account. The cost centers are also indicated on the stamp for the account assignment. Allocation to a cost center enables costs to be allocated to different cost units.

The correct account assignment: the basis of the cost analysis

Only through the account assignment does controlling receive a meaningful database that it can use to analyze costs such as production costs. However, this is only possible if the accounting department assigns all costs to the correct accounts. Account assignment is not a problem for regularly recurring incidents. Aside from extraordinary expenses and income, they sometimes create difficulties. So that you can rule out sources of error from the outset, it is advisable to work with a tax advisor or auditor.


Account assignment refers to the recording of documents and their assignment in expense and income accounts, usually with the help of a chart of accounts. No posting without receipt. For this reason, you have to show a receipt for every booking. The assignment is made by means of notes on receipts and invoices. Thanks to the booking note, you can find the correct receipt for every booking. The documents are divided into the categories external and internal. They serve as proof of correct bookkeeping and must be kept for ten years.

Account Assignment

Meanings of Professional Liability Insurance 2

Meanings of Professional Liability Insurance 2

Benefits and scope of professional liability insurance

Professional liability protects the insured by providing support in examining and defending against unlawfully raised claims for damages by third parties and handles the processing and payment of justified claims. This only concerns the damage that the insured unintentionally inflicted on a third party.
The exact services that are included in the scope of insurance vary depending on the industry and insurer. You can design a lot individually.
This usually includes personal injury and property damage. Many good insurers also have a so-called financial loss liability module in their program that you can combine with professional liability.

Are my own damages covered by professional liability insurance?

It usually only covers damage that you have caused third parties. Anyone who suffers their own damage can only assert this if the concluded contract includes personal damage. Damages such as fidelity caused by an employee, resignation by a client, reputational penalties or contractual penalties for breach of a confidentiality agreement would be possible. Here, too, you have to note that these are individually negotiable additional services.

When does professional liability insurance pay and when does not?

As part of the agreement, the insurance pays for the damage caused by the customer unintentionally or negligently (slightly and grossly negligent).
Damage that is deliberately inflicted on a third party is excluded. However, the insurance company decides on a case-by-case basis whether, in the case of gross negligence, it may only cover part of it or nothing at all.
In addition, the insurance does not pay if certain risks have been excluded in the contract (industry-specific exclusions).
In addition, there are violations of the rules of conduct listed in the contract, such as the immediate notification of damage. This also means that the customer does not hire experts and lawyers without consulting the insurance company, but first waits for the cost coverage promise.

As a rule, the right to fulfillment is excluded

According to AVIATIONOPEDIA.COM, there is another type of damage that is normally not covered by insurance, namely performance damage. This means that if you, as the debtor , fail to provide your promised service to the customer or do it too late and this results in damage, then this would be a loss of performance. The insurance usually excludes the assumption of this damage in its terms and conditions . Therefore, you must read the contract very carefully and pay attention to sentences that list “uninsured claims”.

What insurance concepts are there for professional liability insurance?

When it comes to professional liability, there are usually two basic concepts and a combination of both:

Protection of pure financial losses

Anyone who advises their customers or perhaps prepares expert reports could cause financial loss in the process. The professional liability insurance contains a protection against the pure financial loss, which can occur in the exercise of the activity and which is reclaimed in the context of a claim for damages from the injured party.

Protection against personal injury and property damage

Various types of accidents can occur while working with people, which could result in injury, illness, or property destruction for that person. It is enough for a customer to fall in the entrance area. Or with craftsmen who damage the customer’s furnishings when setting up their devices. Therefore, professional liability insurance also includes the component that offers protection against personal injury and property damage.

Insurance coverage for GDPR violations

Since the introduction of the new data protection guidelines, there have been repeated fines for violating the GDPR. If one of your customers violates this because of your incorrect advice, the insurance will cover the damage. If you violate it yourself, the damage will not be covered.

Specific examples of damage from professional liability

Personal injury could occur, for example, if the construction site was not secured properly. Construction workers could injure themselves if they fell and demand compensation in the form of compensation for pain and suffering and loss of earnings.

Property damage could occur if an architect planned incorrectly. If a foundation is inadequately sealed and water seeps into the basement as a long-term consequence, the architect or insurance company must undertake the renovation.
Pecuniary loss could occur if the advice was given or the processing was wrong. For example, an architect could inadvertently release an invoice while reviewing construction site invoices. If the biller is already in bankruptcy when the error is noticed, the money cannot be recovered and he must compensate the customer for the damage.

What does professional liability insurance cost?

Unfortunately, it is not possible to provide a general answer to this question, as the contributions vary greatly depending on the provider. That also depends on how high the risks for certain damage are and what amounts of cover are desired. In addition, deductibles could be chosen.
In addition, many services can also be individually tailored and supplemented with certain modules. Since the contributions have increased by up to 10% everywhere since July 2018, it is worthwhile to make a comprehensive comparison of different providers. The decisive factor should not be the contribution, but what service is offered for it!

Deduct the costs of professional liability insurance against tax

The good news is that you can deduct professional liability insurance as a business expense from tax . This is not possible with private insurance.

Professional liability: revocation, resignation & termination

As with any liability insurance, it is possible to revoke this within two weeks according to the Insurance Contract Act (§ 8 VVG). However, there are also exceptions that exclude the right of withdrawal : for example, a contract term of less than a month or a contract for provisional cover. Even insurance policies that guarantee immediate protection often rule out revocation.

The insurance is usually taken out for a certain period of time and can then be extended or terminated in good time. The insurance is usually automatically extended by one year if you do not cancel in time. In this case, the period of notice is set at least 3 months before the end of the insurance year (Section 11 VVG).

However, there are also multi-year contracts that can be terminated at the end of the third year of the contract, as well as individual notice periods that are specified in the contract.

There is also the option of extraordinary termination of the contract. This is possible, for example, after a premium increase (without a corresponding improved insurance benefit in return) or if the insurance company has refused to accept the loss.

Professional Liability Insurance 2

Meaning of Earth Layers

Meaning of Earth Layers

If we could cut planet Earth in half like a peach, we would see certain similarities between the layers of both: the core would correspond to the core of the planet; the edible part would be equivalent to the mantle ; and the shell would be the crust .


The core is the central and warmest part of the planet, with temperatures ranging from 3000 to 5000 ° C. It can be divided into inner core and outer core.

Inner core

The inner core corresponds to the part that goes from the center of the planet to approximately 1216 km towards the surface. Despite being an extremely hot region, the inner core is solid, as it is under great pressure. It consists mainly of the metals nickel (Ni) and iron (Fe).

External core

The outer core is the layer that extends from the inner core to 2170 km towards the Earth’s surface. It is also composed of iron and nickel, but in a liquid state. Due to the constant movement of this layer, the Earth’s magnetic field is generated , which acts as a shield against strong solar radiation, being one of the factors that make life on the Earth’s surface possible.


The mantle consists of magma , which is a molten rock material. It lies between the core and the earth’s crust, being divided into two parts: the lower mantle and the upper mantle.

Lower cloak

The lower mantle is the layer of the planet that starts from the outer core and extends for 2200 km towards the surface. This portion corresponds to approximately 50% of the mass of the planet Earth. In this region, magma is composed of a great diversity of fused elements, such as silicon (Si), magnesium (Mg), oxygen (O2), iron (Fe), calcium (Ca) and aluminum (Al).

Because it is closer to the core, it reaches higher temperatures, up to 4,000 ° C. As they heat up, the deeper layers of magma tend to move towards the crust, forcing the more superficial layers of magma to move towards the nucleus.

Upper cloak

The upper mantle is located above the lower mantle, extending for approximately 640 km to the crust. Between the most superficial part of the upper mantle and the solid surface of the planet is a region of pasty rocks called asthenosphere .

This region allows a large part of the phenomena that occur on the planet’s surface, such as earthquakes , volcanic eruptions and tsunamis. In a volcanic eruption, for example, magma reaches the surface. The solidification of the magma gives rise to the magmatic or igneous rocks . These, in turn, when they wear out over thousands of years, form fragments that, when they accumulate in lower areas of the territory, give rise to another type of rock, the sedimentary ones .

Magmatic or sedimentary rocks, which undergo transformations due to the variation in temperature and pressure, generate metamorphic rocks , that is, which have undergone “metamorphosis”.


The crust is the most superficial layer on the planet, consisting of solid rock. It is relatively narrow when compared to the other layers, reaching a thickness of up to 60 km.

The crust is fragmented into several pieces, called plates, which move in several directions, due to the boundary convection currents. They are responsible for intense seismicity, volcanic activities, formation of elongated mountain ranges and basins in the oceans.

It is distinguished in two structures: continental and oceanic.

Continental crust

The continental crust has a thickness that varies from 20 km to 60 km, forming the continents and the continental shelf, a region of the ocean close to the coastal coasts. It is mainly composed of sedimentary and metamorphic rocks .

Ocean crust

The oceanic crust is formed by the ocean floor or ocean floor. Its thickness varies between 5 km and 10 km. It is denser than the continental crust, with basalt as a typical rock, a magmatic rock .

Earth Layers

Meanings of Professional Liability Insurance

Meanings of Professional Liability Insurance

“Wherever there is planing, there are shavings,” the saying goes. But anyone who hurts their customers or causes them financial damage has to pay for it. Unless he has professional indemnity insurance to take care of that .

What is professional liability insurance?

According to ACRONYMMONSTER.COM, professional liability insurance is the counterpart to personal liability insurance and takes over the damage that a business person or freelancer causes a customer in the course of his activity.
For example, if a customer trips on a wet floor or a loose carpet and breaks his leg while visiting the shop or office. Some cases of damage can result in compensation payments that are so high that you, as an entrepreneur, would have to file for bankruptcy.

A good professional liability insurance will help you in these cases. It first checks the legality of the claims for damages and rejects them if they are not justified. This part is also called passive legal protection. If the customer actually has a legitimate claim, the insurance will cover the necessary costs.

In the following article you will also find out more about whether you need such insurance by law or should take out voluntarily and what damage you can cover with it.

Who Needs Professional Liability Insurance?

A distinction must be made between two groups of people: those who are legally obliged to take out such insurance and those who should absolutely have one for safety reasons so that they do not go bankrupt in the event of damage.

There is a legal requirement for insurance, for example, for lawyers (§ 51 BRAO (Federal Lawyers’ Ordinance), insurance brokers and real estate loan brokers (§34d and §34i Trade Regulations). In addition to the statutory provision, there are also requirements of the professional association for certain professional groups that must be able to provide such insurance The group of executives or employees in important organizational functions as well as freelancers are also very important.

Affected groups are, for example, architects and engineers, doctors, pharmacists, financial investment brokers, tax consultants, auditors and notaries.

Professional liability insurance for doctors

Such insurance is very important for doctors, because they have a particularly high risk in their work. Patients could even die in the process. Doctors must take out professional liability insurance according to the requirements of the State Medical Association. In addition, we recommend that you take out property damage liability insurance.

Professional liability insurance for employees

Employed doctors are liable with their private assets if the patient is harmed during treatment. In the case of employed doctors, however, liability is usually regulated by the employer’s insurance company. Before you take out your own insurance as an employed doctor, you should first check to what extent the insurance of your boss or the clinic is liable for your damage.
It is also important whether gross negligence is also insured and whether the employer can assert a claim for recourse. To what extent are external activities also insured? A doctor who advises a friend in his spare time can inadvertently cause damage. Because there are so many points to consider, it is imperative to examine this closely.

Financial loss in advisory professions

The financial loss is to be seen separately from the professional liability. It is to be covered by a financial loss liability insurance. This is particularly important in advisory professions such as lawyers or tax consultants. But also notaries, corporate or financial consultants.
Property damage liability insurance is even required for this group. If the customer or client suffers damage due to incorrect advice or if the tax advisor submits the documents to the tax office too late, the insurance company will reimburse the damage and handle the entire case.

Professional liability insurance for all freelancers and self-employed

In addition to the groups that have to make a mandatory commitment, there are also professions for which it is advisable to have insurance . Whenever the risk is so high that damage could endanger your existence, you should take out such insurance.
These professional groups are, for example, trustees, interpreters, translators, journalists, IT experts, real estate agents, all groups of people who have anything to do with social media, websites, blogs, internet portals or apps, online shop operators and all consultants.

Are you self-employed and want to know which insurance you need in each case? Find out more about the topic in our article 4 insurances that every self-employed person must have!

Professional liability insurance for employees

Ordinary employees are like the salaried doctors mentioned above. Normally the company or the employer is liable for the damage caused. All employees without special functions are insured through the company and do not need their own insurance.


No rule without exception. Anyone who holds an employee position in which they perform special functions, i.e. managerial functions such as board member or manager, but also managing director or member of the supervisory board and also as an authorized signatory , should take out professional liability insurance. Because they can be held directly liable and have to pay for the damage.

Follow-up liability insurance

This insurance is particularly important for some occupational groups, because it ensures that your insurance company also covers a mistake that occurs later.

Follow-up liability insurance for doctors

According to § 195 BGB, the normal limitation period is 3 years . But if you as a doctor have forgotten surgical accessories or bandages in a patient’s stomach and he only notices it after 3 years and a day, then this damage can of course still be repaired. The limitation period therefore only begins as soon as the patient has discovered the error.

Most insurance companies already take this problem into account and have included a five-year supplementary liability insurance in the contract. Even a retired doctor is not immune to such problems, so he should definitely have extended liability insurance that also fully includes retirement.
In addition, it could also be the case here that a doctor advises a colleague even in retirement or rushes to help in the event of an accident and causes damage on the occasion. Without insurance, he would be liable for it with his private assets!

Examples of extended liability as an architect

Architects are, in a way, just as vulnerable as doctors. Because the liability risk has increased due to a change in the law. Architects are liable for all planning errors and construction defects. This can happen in retrospect with some building planning and building regulations errors, especially in building projects that do not require approval and that no longer require official inspection. Such damage can run into the millions and only come to light years later.
A popular example are poorly secured construction sites with personal injury if someone falls. If this person is then possibly paralyzed, high pension and care costs are incurred. In addition, there is moisture damage in the event of poor sealing or delay damage.

Differences between professional liability – public liability – property liability

Usually the term is used colloquially synonymously. It is also difficult to differentiate, as insurance companies often cover both together. However, professional liability in the narrower sense usually covers property damage and personal injury and outsources the financial damage to financial loss liability.
Apart from that, professional liability is about damage to a professional group and public liability for the company.

Professional Liability Insurance 1

Meanings of Small Business Invoice Part II

Meanings of Small Business Invoice Part II

Sales tax on the small business invoice

VAT shown? This could get expensive! Under no circumstances should a small business invoice result in a sales tax amount. Because as a small business owner within the meaning of Section 19 (1) UStG, he is not entitled to claim sales tax from a business customer. But what happens if, by mistake, sales tax is shown without authorization ? In that case, you have to pay the sales tax amounts paid to you by the customer to the tax office . This also applies if the recipient of the service – i.e. the person who paid the sales tax – is not entitled to deduct input tax himself. If such an error is noticed, a corrected invoice must be sent to the customer immediately.

In the worst case, if the sales tax paid by the customer is not passed on to the tax office, criminal proceedings for fraud can ensue. Because in that case an amount was demanded to which there is no entitlement. In this case, the result can be a severe fine, and under certain circumstances even a prison sentence.

Correct incorrect small business invoice

It is not pleasant, but it can happen that you have incorrectly issued an invoice . However, this fact can have negative consequences for you and the invoice recipient:

  • You may have to pay VAT inadvertently.
  • The recipient of the invoice may not be able to claim input tax if, for example, information is incorrect.

In that case, it is important that you correct the small business bill .

But when exactly do you have to correct the invoice ? You always have to change an invoice if it contains incorrect or missing mandatory information. You do not have to correct typing errors if the meaning of the calculation is still clear. You have to differentiate between two types of incorrect invoices:

Invoices that have not yet been paid:

In this case you will write a new invoice with the old invoice number . Alternatively, you can write a correction document. In this document you correct the error or errors, refer to the invoice number and the date of the original invoice .

Invoices that have already been posted:

You have to cancel this invoice . To do this, you have to write an invoice correction and note a negative invoice amount there. In any case, you must give the invoice number and the invoice date of the original invoice. Then you have to write a new invoice with a new invoice number and send it to the customer.

Send small business invoice

With the small business invoice, the annoying paperwork is no longer necessary. Each invoice can of course be sent in the still valid paper form as well as by fax or email . This makes work considerably easier, but the valid invoice still has to meet some requirements.

  • The invoice must be genuine – it must therefore clearly reflect the identity of the biller
  • The invoice must be intact – so it must not be changed afterwards
  • The recipient must be able to read the invoice .

Retention periods for invoices

There are special retention periods for invoices so that the tax office can check your documents at any time . These deadlines are regulated by law in Section 14b. But do these obligations also apply to small business owners? The answer is yes – in Section 19 UStG, which contains the small business regulation, reference is made to a number of exceptions that apply to small business owners. For this reason, even small business owners have to keep their invoices for ten years . The deadline applies to two types of invoices:

  • Outgoing invoices: invoices that you have sent to your customer.
  • Invoices : invoices that you get from a supplier or service provider for a received power from you or product.

Small business invoices to other EU countries

If you as a small business owner send an invoice abroad within the EU , then you are also subject to the small business regulation in this case. Specifically, this means that you are not allowed to show any sales tax on your outgoing invoice in accordance with the legal requirements of § 19 UStG. It doesn’t matter whether your small business owner’s invoice goes to a private individual or to a company.

Invoicing program for small business owners

According to USVSUKENGLISH.COM, an invoice program is very useful for you as a small business owner as well as for the self-employed . This also applies if you only write a few invoices a month. The advantages speak for themselves:

  • You save a lot of time and nerves when writing the invoices as well as the bookkeeping .
  • As a small business owner, you always have an up-to-date overview of your accounting.
  • You only fill in the important information such as invoice recipient , delivery and service date , products, quantity, price, etc. – the program does the rest for you automatically .
  • Invoices that you have written with an invoice program comply with the legal requirements – so you are always on the safe side.


If you, as an entrepreneur, meet the requirements of § 19 UStG , you can make use of the so-called small business regulation . This regulation makes your bookkeeping a lot easier and you can save yourself a lot of effort. However, the small business regulation is not suitable for everyone and there may well be reasons to forego it voluntarily. But it is important for you with the regulation that you pay close attention to your billing . Under no circumstances are you allowed to show sales tax on the small business invoice . In addition, you have to explicitly refer to the small business regulation on your invoice.

Small Business Invoice 2

Meanings of Small Business Invoice

Meanings of Small Business Invoice

In general, small business owners have fewer accounting obligations than a company that is subject to VAT. The bookkeeping should not only be simplified for small business owners, but also connected with less tax, since they are mostly below a certain turnover limit. Although a small business owner does not have to levy sales tax, he still has to adhere to the provisions of the Sales Tax Act. This applies above all to the compulsory components of a small business invoice , which are specified in Section 14 (4) of the UStG are listed in detail. Furthermore, according to § 14 Paragraph 2 Clause 1 UStG, small business owners as well as entrepreneurs are obliged to write an invoice within six months if a service has been provided to another entrepreneur. In this article, you can find out what other obligations and special features you have to consider with the small business invoice.

When are you a small business owner?

The conditions under which you are recognized as a small business owner can be found in § 19 UStG . The small business regulation represents a simplification regulation for companies with a low turnover. Most important are the limits that you have to observe in your turnover in the year of establishment and in the current year. This means that you and your company must not exceed a turnover of 22,000 euros in the year it was founded and 50,000 euros in the following year . The small business regulation exempts you from reporting sales tax .

By the way, you can also work as a small business owner if you run several companies . Here you have to note, however, that the total turnover of these companies does not exceed the statutory limits. But you have the advantage that there are no tax-exempt sales under the calculation for the total sales. What are tax-exempt sales is precisely defined in § 4 UStG .

Apply for small business regulation

According to THEINTERNETFAQS.COM, the small business regulation , you can directly apply to your establishment . Your responsible tax office will send you a questionnaire on how to record your taxes . As a founder, you must fill out this questionnaire. Under point 7 you will find “ Information on registering and paying sales tax ”. Here you can apply for your small business regulation . If you want to apply for the regulation later, i.e. after your establishment, you have to do so directly at your responsible tax office.

Advantages and disadvantages of the small business regulation

As a small business owner, you not only benefit from simplified bookkeeping , but also have other advantages that we have listed here for you. At the same time, however, the small business regulation also has disadvantages .

Advantages Disadvantage
Time saving : You do not need to make an advance VAT return and you can save a lot of time in your work. You do not have to report any tax and therefore do not have to report it to the tax office. No input tax deduction :
With the small business regulation you have the disadvantage that you are not entitled to input tax deduction . This can be a disadvantage especially at a time when you have high expenses to make.
Price advantages :
Your offer is primarily aimed at private customers and end consumers. Since no sales tax is due, you can offer your products or services cheaper.
Competitive disadvantage :
If you offer your services or products to companies, they cannot claim input tax from your invoice. Therefore, it is entirely possible that they will turn to another company. You are at a clear competitive disadvantage here.

Writing a small business owner invoice

When you create an invoice, there are certain points that you absolutely have to consider so that your small business invoice is legally compliant and accepted by the tax office.

Mandatory information on the small business invoice

As far as small business invoices are concerned, as an entrepreneur you have to comply with some mandatory information for invoicing . This means that the following mandatory information must also be found on the small business invoice :

  • Full name and address of the small business owner and the invoice recipient
  • The tax number or the sales tax identification number
  • The date of the invoice or issue
  • A consecutive invoice number
  • Quantity and type of products delivered or scope of services
  • The (exact month) delivery or service date – can also be replaced by a note if the delivery / service date coincides with the invoice date
  • Reference to the reason for the lack of sales tax information

Reference to § 19 UStG – formulation examples

It is important that you always include the reference to § 19 UStG on the invoice. For example, you can choose the following formulations:

  • “According to § 19 UStG no sales tax is charged.”
  • “No sales tax identification, as small business owners according to § 19 UStG.”
  • “According to § 19 UStG the invoice amount does not include sales tax.”
  • “Invoicing takes place without showing the sales tax according to §19 UStG.”
  • “No sales tax ID due to application of the small business regulation according to § 19 UStG.”
  • “As a small business owner within the meaning of Section 19 (1) UStG, no sales tax is charged.”
  • “In accordance with § 19 UStG, no sales tax is included in the invoice amount.”

Sample invoice for small business owners

Fortunately, you don’t have to write every invoice yourself, but can save yourself time and effort. You can find numerous free samples and templates online for your small business invoicing. With a small business invoice template, you can create an invoice quickly and easily. The required mandatory information is already included, you just have to check that the corresponding invoice template for small businesses is valid and that it does not contain a sales tax certificate. The same applies if you want to make an offer .

Other advantages of a template for the small business invoice

  • the invoice template is free of charge
  • you can easily personalize a sample for your small business invoice
  • all mandatory information required by law is already included and you cannot forget any
  • the invoice template is quick and easy to fill out
  • by using a template you create a professional impression

Small Business Invoice 1

Meanings of Retention Periods Part V

Meanings of Retention Periods Part V

Where do you have to keep your documents?

In the tax code (§ 146 AO) it is regulated that the books and the otherwise necessary records “are to be kept and kept within the scope of this law”. This means that you are legally obliged to keep your documents in Germany. Beyond that, however, there are no detailed requirements for a specific location.

Accounting software

So that you can ensure that all documents are unchangeable, complete, correctly readable, traceable and machine-evaluable and, above all, can be viewed at any time, it is ideal if you use good accounting software for your bookkeeping . With its optimally coordinated functions, such software fulfills all legal requirements and above all helps you with other requirements. For example, how to properly create invoices.

You can digitize all of your tax-relevant documents and archive them in the GoBD-compliant software. This not only saves time, but also paperwork and you are always on the safe side when the tax office wants to check your documents.

Destruction options after the end of the retention period

After the retention period has expired, you can usually destroy the documents. After the retention period has expired, you may only not destroy documents if they are still relevant to various processes or incidents. The documents must still be kept after the end of the retention period, if an external audit has started, if pending investigations relating to tax or fines are ongoing, or if a provisional tax assessment applies. In the case of pending proceedings or legal remedies that are expected due to an external audit or to justify applications by a company, the documents must also be kept beyond the end of the retention period.

In theory, you can simply delete the digital data and shred paper documents. However, it is important, especially since the tightening of the legal regulations under the GDPR , that you think about data protection. Especially if your documents contain not only company-internal secrets, but also sensitive personal data. You must destroy these so well that they can no longer be made legible by strangers. Even before the GDPR, DIN 66399 regulated the “regulations for data protection compliant file disposal” according to the Federal Data Protection Act. Disposal was linked to various data protection classes.

Creation of a provision

According to TECHNOLOGY-WIKI.COM, the storage of business documents is associated with costs, for example for organization systems in the form of files or folders, shelves and index furniture as well as for storage rooms. Archiving on data carriers also generates costs. Companies must set up a provision in the annual financial statements for the costs of storing business documents . This provision applies to uncertain liabilities. According to commercial law, such provisions are subject to a passivation requirement. The retention obligation is economically caused in the year in which the respective documents are accrued. If invoices and commercial letters are written in one year, the retention obligation is created in this year.

Consequences of violations of the retention periods

According to case law, the burden of proof lies with the taxpayer. The taxpayer must prove tax-relieving and tax-reducing facts if proceedings regarding tax evasion are pending against him. Violations of the retention requirement are also considered violations of accounting and recording obligations . If documents that are required to be retained are not available, the tax authorities can estimate the tax bases due to the lack of evidential value. In the worst case, the maximum amount can be set for a company. The tax authorities can, for example, use comparative figures from the same industry as a basis. If a company violates the retention obligation and thus the accounting obligation, so sanctions can arise. If invoices are not kept for ten years, a fine of up to 5,000 euros can be levied on a company, just as with the waiver of invoicing. If private individuals do not comply with the retention obligation because they do not keep invoices for the services relating to property for at least two years, they can be fined up to 500 euros.

Compliance with the retention periods is important for the evidential value of a company. Companies are obliged under tax and commercial law to store accounting receipts, business documents and invoices and must expect penalties if they fail to comply with their retention periods.


Compliance with the retention periods is not only relevant for you because it could threaten a fine. In cases where you lack powers of attorney and documents, legal proceedings can also result in negative results. A deficiency in your newly acquired home that you cannot prove on the basis of documents and have the repairman repaired could cost you a lot of money. Some missing documents can even drive you into ruin with such types of “consequential damage”. It is therefore in your own interest that you adhere to the retention periods. Therefore: better keep too long than too short!

Retention Periods 5

Meanings of Retention Periods Part IV

Meanings of Retention Periods Part IV

Handling of data carriers

Often the documents are no longer kept in paper form, but can be archived on data carriers. However, electronic invoices are subject to strict retention requirements. Many companies do not know that electronic invoices must also be saved electronically. In addition to invoices, books and other records can also be stored on data carriers.

This is where the GoBD come into play. According to them, invoices must be stored unchangeably so that they are completely traceable and verifiable. If they are not, there is a risk of high additional claims from the tax office.

The data of the invoices and the accounting receipts must be available at all times during the entire retention period. It must be possible to make them readable immediately when they are needed. In the case of an external audit, tax authorities have the right to inspect the data carriers and the data stored on them and to use the data processing system for the audit. The tax authorities can also demand that the data on the data carriers be evaluated automatically according to their specifications. The data stored on the data carriers can be made available on a machine-usable data carrier at the request of the tax authorities.

Archiving on data carriers

Archiving on data carriers offers you the advantage that the data can be easily accessed and that no large paper files have to be created. You can use a search function to find the documents. You don’t have to search through folders to find important receipts quickly. Instead, you can create directories in the form of folders on a data carrier. The law doesn’t tell you what kind of media to use. However, they must be data carriers on which your data will be preserved indefinitely. Such data carriers can be external hard drives or SSD hard drives. USB sticks are not suitable as data carriers, as the data can only be stored there for a limited time and compliance with the retention period is not always guaranteed.

How do you have to keep documents?

In its letter of November 14, 2014, the Federal Ministry of Finance commented on the “principles for the proper management and storage of books, records and documents in electronic form and for data access (GoBD)” on how you should keep your documents. However, there are no detailed obligations, instead the type of storage must meet the following criteria:
Your digitally archived documents must be accessible at all times. In addition, they must be unchangeable, complete, correctly legible, traceable and machine-evaluable. If you adhere to these guidelines with your method, the tax office has nothing to complain about.

What happens to the original?

In principle, you can archive documents in paper form or digitally. However, that doesn’t mean that you can just scan everything in and throw away the originals!

Paper or electronic archiving

With powers of attorney, contracts or documents, for example (notarial documents with seal and stamp) you can scan the original into your digital archive in order to complete your files and to find the data faster and to be able to view it electronically. But since only the original document has evidential value, you must under all circumstances keep the original in such a way that it remains unchanged and legible and that you can submit it to publishers immediately.

What happens to emails?

For e-mails and attachments to e-mails, as for all digital documents, they must be archived in exactly the form in which they were received by you. So you can neither keep printouts nor save the attachments somewhere and then delete the e-mails. You have to record the e-mail archiving in your e-mail account to prove when it was received with which attachments. Any other form would no longer guarantee immutability.

Forms for storage

According to SCIENCEDICT.COM, the documents must remain legible during the entire retention period. In principle, it makes sense to keep documents in the original, but if such documents are thermal copy paper, they must be photocopied or put on a data carrier, as they will fade over time. In this case, the receipt on thermal copy paper no longer needs to be kept.
Annual accounts and opening balance sheets must always be kept in the original. Invoices as well as commercial and business letters can be stored in the original, but also pictorially. Figuratively means that these documents can be scanned and saved on a data carrier. If documents are kept in the original, they must be backed up. The room in which they are stored must be protected from external influences such as moisture, water and fire. The documents must be kept in an orderly manner. This means that they can be checked by an expert third party within a reasonable time. A set of rules can serve as the basis for archiving.

Retention Periods 4

Meanings of Retention Periods Part III

Meanings of Retention Periods Part III

Commercial and business letters

A retention period of six years applies to commercial and business letters. An exception are documents that are kept in an open item accounting, because they have to be kept for ten years. Invoices and duplicates of invoices are also considered commercial letters, for it holds a ten-year retention period.

Tax documents

According to PSYKNOWHOW.COM, a retention period of 6 years applies to tax documents. This includes, for example, your travel expense reports and logbooks, but also certificates of exemption and working time lists.

Personnel records

Regarding retention periods for personnel documents, it is relevant whether they are relevant for taxation. In this case, they must be kept for six years. Payroll accounts and other documents that are relevant for payroll accounting are used for taxation purposes, as wage tax deductions are calculated and must be paid to the tax office. Payrolls are drawn up in many companies. They list the wages for each employee and break them down in columns according to gross wages, wage tax, church tax, solidarity surcharge, social security contributions and net wages. In the financial accounting only the sums of these columns are recorded. These documents form an important basis for financial accounting and should be kept for ten years.

Regulation for other business documents

Documents or other papers that allow insight into business transactions are considered other business documents. You can explain typical and atypical business transactions. Such other business documents can be contracts, protocols, freight documents, customs documents, order slips, delivery notes, credit documents, receipts, insurance documents, hourly and piecework slips, receipts, receipts, receipts, claims documents, payrolls. In addition, the storage of invoices is specially regulated. Accordingly, entrepreneurs must keep a duplicate of the invoices that they or a third party issued. In addition, all invoices that the entrepreneur has received must also be kept.

What retention periods apply to private individuals?

Private individuals also have to observe different deadlines for their documents. Here, too, you have to take into account different periods of 2.5, 6 and 30 years up to lifelong retention. Here are a few examples:

Retention period: 2 years

You are probably familiar with the two-year period from your everyday purchases of household items, for example. All sales contracts, invoices and receipts must be kept for warranty or possible exchanges. It is particularly important when it comes to tradesman’s invoices or contracts and invoices from appraisers, lawyers or notaries.

Retention period: 3 years

There are no regulations for this, but it is advisable to keep your bank statements and bank records for 3 years. If you have used a bank statement for your tax as evidence, you must of course keep it for more than 10 years.

Retention period: 5 years

This deadline is very important to you if you have bought or built a home. Because of the deadlines for complaints and claims for defects, you have to keep all relevant invoices and documents for 5 years.

Retention period: 6 years

According to § 147a AO (tax code), all taxpayers with an annual turnover of more than 600,000 euros per calendar year must keep their documents for 6 years. As a private person, you are also affected if you are among the high earners.

Retention period: 30 years

Hopefully, this deadline is seldom relevant for you, because it affects unpleasant documents such as payment orders and trial files as well as the resulting judgments.

Lifelong retention:

Lifelong retention is particularly important for your personal documents such as birth and death certificates. But also baptism certificates, marriage certificates, school reports and pension insurance documents or important medical reports.

When do retention periods begin and end?

The beginning and end of retention periods are specified in the Commercial Code and the Tax Code. The retention period begins at the end of the calendar year in which a receipt was created. It ends at the end of the calendar year in which it expires. It is not a question of possibly deviating fiscal and financial years, but always of the calendar year. A retention period begins, depending on the type of document, at the end of the calendar year in which

  • the last entry was made in the trading book
  • an inventory has been drawn up
  • an opening balance sheet or an annual balance sheet has been drawn up
  • either individual or consolidated financial statements have been prepared
  • a commercial letter has been sent or received
  • a booking voucher has been created
  • other business documents have arisen
  • an invoice was written
  • an invoice has been received
  • the last registered wage payment was made

If a retention period according to the legal regulations has expired or is about to expire, it does not expire if the documents are still required for taxes whose assessment period has not yet expired. The deadline does not expire even if important reviews are in progress or the documents are still required for other important incidents, such as legal proceedings.

Retention Periods 3

Meanings of Retention Periods Part II

Meanings of Retention Periods Part II

In the following we have put together some examples for the retention requirements of various documents. Including only those that occur most frequently. But the list is not exhaustive:

document Years
Accounting documents 10
Letters of credit 6
Offers that led to the order 6
Appendix to the annual financial statements (according to Section 264 of the German Commercial Code) 10
Fixed asset books and card indexes 10
Work instructions 10
Outgoing invoices 10
Bank receipts 10
Accounting receipts 10
User manuals for computerized bookkeeping 10
Operating cost accounting 10
Tax audit reports (external tax audit) 6
Evaluation documents 10
Hospitality receipts 10
Balance sheets (including opening balance sheet) 10
Accounting documents 10
Incoming invoices plus any correction documents 10
Export documents 10
Travel expenses documents 10
Payrolls 10
Business letters (received and sent) 6
Profit and Loss Account 10
Credits (to invoices) 10
Commercial letters (except invoices or credit notes) 6
Trading books 10
Inventories (according to § 240 HGB) 10
Annual financial statements with explanations 10
Journals for general ledger or current account 10
Calculation including documents (if tax-relevant) 10
Cash books 10
Chart of accounts and changes to the chart of accounts 10
Bank statements 10
Wage receipts 10
Payrolls for interim, final and special payments 6
Dunning notices and outgoing reminders 6
Sub-ledgers 10
Price lists, general 6
Price lists as booking documents 10
Auditor’s reports 10
Receipts 10
Invoices to entrepreneurs 10
Travel Expenses 10
G / L accounts 10
Check and bill of exchange documents, general 6
Check and bill of exchange documents, general 6
Check and bill of exchange documents as accounting documents 10
Correspondence 6
Donation receipts, provided booking documents 10
Tax returns and tax assessments 10
System manuals 10
Telephone cost statements as evidence for accounting 10
Liabilities (list) 10
Sales books 10
List of assets 10
Insurance policies for ongoing insurance 10
Insurance policies after the insurance expires 6
Contracts if they serve as accounting documents or are tax-relevant 10
Incoming and outgoing goods books 10
Change 10
Money orders 10

Retention periods of two years

Retention periods of two years apply to non-entrepreneurs and primarily concern invoices and payment receipts. In connection with the law to combat illegal employment, private individuals are obliged to comply with retention periods. These retention periods primarily affect owners of residential property in connection with invoices relating to property services. Invoices for various craft services, but also for planning services, maintenance work, gardening or cleaning services must be kept for two years. Although there is no retention period of five years for private individuals, invoices issued for services on the property should be retained for five years. This is important to prove if the property owner refers to the service provider’s warranty obligation.

Retention periods of six years

According to PHOTIONARY.COM, retention periods of six years apply to commercial and business letters that a company receives, but also to commercial and business letters that a company sends. The company must keep copies of these documents. Furthermore, documents that are important for taxation must be kept for six years. Wage accounts must also be kept for six years.

Retention periods of ten years

Retention periods of ten years apply to invoices and other bookkeeping documents with a book function, such as B accounting documents. The shorter periods only apply if shorter retention periods are permitted in other tax laws. Shorter retention periods, which are stipulated in non-tax laws, do not apply to the tax retention obligation. It should be noted that the invoices must be legible for the entire retention period. In this case, periods of ten years are relevant for the tax retention requirement. Retention periods of ten years apply primarily to

  • Books, trading books and other records
  • Inventories
  • Annual accounts
  • Individual financial statements
  • Opening balances
  • Consolidated Financial Statements
  • Situation reports
  • Bills
  • Group management reports
  • Work instructions and organizational documents for understanding the books
  • Accounting documents
  • Documents for customs declarations
  • Duplicates of outgoing invoices
  • Incoming invoices

Unlimited retention periods

In contrast to invoices or accounting documents, which have a limited retention period, unlimited retention periods are referred to as permanent values. Such unlimited storage applies in public administration to documents mostly marked with a “D”. These are primarily files on proceedings before the Federal Constitutional Court, property documents, construction plans for important buildings, legal documents or civil status records. The longest retention period in the economy is ten years. From a commercial and tax law perspective, there are no longer retention periods in business, but various documents such as patents should be used, Construction plans, court rulings, property documents, shareholder agreements and personnel files are kept indefinitely.

Retention periods for various documents

Accounting documents

Various documents fall under the category of accounting records. Invoices count as accounting records, but receipts, delivery notes, bank statements, utility bills, booking instructions, postage books, cash reports, process files, order slips and payrolls are also considered accounting records. In short, accounting records are all documents relating to the individual business transactions. The following applies: accounting records with capital-forming benefits have a ten-year retention period. This is due to the Tax Amendment Act of 1998, the revision of which extended the retention periods for accounting documents from six to ten years.

Bank and cash receipts

Bank and cash receipts are also accounting receipts. Not all bank and cash receipts need to be retained if the purpose of retention is otherwise secured. Such receipts that do not need to be kept are receipts, cash register slips, or receipts. If end-of-day total receipts are kept instead of cash register strips, this is sufficient. The completeness must be guaranteed, information on the name of the business, end-of-day total and date must be available. Here, too, it should be noted that these accounting documents must be kept for ten years.

Retention Periods 2

Meaning of CFD

Meaning of CFD

According to abbreviationfinder, CFD stands for “Contract for Difference”. With a CFD, investors can make profits by speculating on price changes. Contracts for difference are particularly attractive because they are characterized by a high level of leverage. This means that even a low capital investment can bring high profits. However, leverage can also have a negative effect: If the price does not develop as hoped, investors can quickly lose large sums of money. Therefore, CFDs are not suitable for beginners, only for experienced investors.

  • With a CFD, investors and providers agree to swap money and base value at the beginning and end of the term of the CFD.
  • In order to be able to trade with CFDs, the trader must deposit a security deposit (“margin”).
  • CFDs work with a high leverage effect, which multiplies the margin and moves large sums in the market with little capital investment.
  • This mechanism makes CFD trading attractive, but it also carries a great deal of risk.

What exactly is a CFD?

CFDs belong to the category of derivative financial instruments and are highly speculative. Every CFD is a contract between two parties: the investor (or trader) and the provider (or market maker). You speculate on the price development of a certain base value and agree to exchange money and base value at the beginning and end of the term of the CFD. Various trading values ​​are used as the base value, for example stocks, commodities or currencies.

Trade CFDs

The investor can open a long position or a short position. In the case of a long position, he expects the price of the corresponding underlying asset to rise and buys it. At the end of the CFD he sells it again and in the best case makes the previously speculated profit. With a short position, the investor expects falling prices and sells the value in order to buy it back later at a lower price, which results in a profit if it is successful. Speculation is based on various indices.

CFDs are short-term speculative transactions that are often completed within a day. Accordingly, the prices are exposed to strong fluctuations, which increase the risk of loss. If you want to hold your position overnight, i.e. beyond the close of trading, you have to make compensatory payments. The amount of these payments results from the respective calculation basis, the holding period and the position size at the close of trading. The following applies to short positions: If the reference interest rate exceeds the discount, the investor receives a credit.

The transactions take place over-the-counter (OTC). Not every platform allows CFD trading. The broker comparison shows where CFDs can be traded .

Important terms relating to contracts for difference

Investors who want to trade CFDs should know the following terms:

  • Margin: The margin is a security deposit that the trader deposits when opening a position. How big this has to be depends on the underlying asset being traded. The margin is tied to the respective position; The investor can invest the untied capital in further positions.
  • Leverage: By providing security, investors leverage their capital many times over. For example, if the margin is 1 percent and you bet 100 euros, you can move a capital of 10,000 euros.
  • Stop Loss: Traders set a stop loss limit at the point where their position should be automatically closed if the price should develop in the opposite direction to expectations.
  • Base value: The base values ​​are the actual trading values. These are, for example, indices, stocks, commodities or currencies.
  • Intraday trading: The investor opens his position at the beginning of the day and closes it again at the end of the day. So he carries out the CFD business within a day. This practice is common for short-term speculations.
  • Overnight position: If a trader holds his position beyond the respective close of trading, it becomes an overnight position. Compensation payments are due for this.
  • Diversification: In order to increase their chances of winning, investors often open several positions on different markets. In this way, you distribute your capital over several underlyings and a single loss is less significant.

Risks when trading CFDs

Trading Contracts for Difference is a very risky business. The high leverage can on the one hand bring high profits, but on the other hand lead to large losses. The available total capital is often smaller than the lost amount, which leads to a total loss. However, the account cannot be overdrawn and private investors are not obliged to make additional contributions after a decision by BaFin since August 10, 2017. That at least limits the incalculable risk of loss.

What happens in the event of a total loss?

If the loss exceeds the capital available on the CFD account, the bank usually arranges for a forced closing; that is, it closes all open positions of the investor. Before the deposited security deposit is used up, the bank also warns with an initial margin call when 80 percent of the credit has been used up. A second margin call follows at the 90 percent limit and at the same time announces the impending forced closing.

Other risks

Some of the other risks associated with CFD trading include:

  • Overnight risk: Investors cannot react immediately to price changes in positions held overnight.
  • Market price risk: Underlyings can change.
  • Liquidity risk: In the event of market disruptions and outside trading hours, investors cannot open or close positions.
  • Day trading risk: If a trader makes losses within a day and tries to compensate for them with even riskier new deals, the loss can multiply in the event of failure. The high level of trading activity can also lead to high transaction costs.
  • Bank or market maker insolvency.
  • Organizational and operational risks.

How can the risks be reduced?

The risks involved in trading Contracts for Difference are great and varied. However, through skilled risk management, investors can limit the risk of loss. Before opening new positions, they calculate the profit factor – using the value of the winning trades and the value of the losing trades as well as the average profit and average loss. If the profit factor is greater than 1, the trader can make money, so his plans are profitable. In addition, he should define an initial risk that he is maximally willing to take and set a stop loss accordingly.

A proven money management model is the “1 percent from the account” model. Investors choose a risk of 1 percent for each position. Another means that reduces the risk of loss and increases the chances of winning is diversification.