Procedural documentation in accordance with GoBD: what you need to know
What is procedural documentation?
Procedural documentation is a written account and description of all workflows and processes within a company or organisation, which serves to ensure the transparency and traceability of business processes.
What should be included in procedural documentation?
Procedural documentation should include all relevant information relating to business processes, including process descriptions, work instructions, organisation charts, responsibilities, documentation requirements, internal control mechanisms and other relevant documents that ensure the transparency and traceability of processes.
Is it compulsory to document procedures?
Yes, in Germany, the documentation of procedures in accordance with the German Fiscal Code (AO) and the GoBD (Principles of Proper Accounting) is required by law in many cases.
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Procedural documentation in accordance with GoBD
What is meant by ‘process documentation’?
A procedural document is a written document setting out the steps required for a specific process or task. It serves as a guide for carrying out the process and provides instructions on how to perform the task correctly and safely. Procedural documentation may also include rules, procedures, responsibilities and the resources required.
Procedural documentation therefore describes the process intended from an organisational and technical perspective, e.g. for example, in the case of electronic documents and document archiving, from the creation of the information through to indexing, processing and storage, unambiguous retrieval and machine-readability, protection against loss and tampering, and reproduction. Procedural documentation usually consists of a general description, user documentation, technical system documentation and operational documentation.
This also means that the GoBD applies to those taxpayers who are required to keep accounts and records under certain regulations. In the broadest sense, this includes taxpayers engaged in business activities. One of the principles of the GoBD is, amongst other things, that the accounting records and all other records must be verifiable. To ensure such verifiability, procedural documentation is required for the entire process, including the software programmes involved. The tax authorities justify this on the grounds that the respective data-processing system bears primary responsibility for the correctness of the records.
Who is process documentation relevant to?
The short answer is: every business. Ever since the publication of the Federal Ministry of Finance’s (BMF) circular on the principles of proper maintenance and retention of accounts in electronic form, as well as on data access – known as GoBD for short – taxpayers have regularly been confronted with the term „procedural documentation“. Over the past few decades, computerised accounting has completely replaced older manual accounting procedures. Nowadays, electronic data processing is the norm in tax consultancy firms and within companies themselves. Furthermore, the market is teeming with countless providers of software solutions who attract customers with digitisation solutions across a wide variety of sectors and offer the appropriate products to meet these needs.
Hsp Software, based in Hamburg, is one of Germany’s oldest and most experienced software companies in this field. This medium-sized company develops its solutions entirely in Germany, such as the „Opti.Tax Dokumentation“ software solution for process documentation.
In the letter mentioned at the outset, the tax authorities have summarised and further developed various previously applicable guidelines and regulations relating to traditional and, in particular, computerised accounting. The GoBD sets out the measures that entities subject to accounting requirements must take to ensure that business transactions can be recorded completely, accurately, in a timely manner and in an organised fashion using IT systems.
What does procedural documentation look like?
The scope of the documentation is determined by what an external third party would need in order to understand the data processing procedures, the books and records, and the documents retained. This means that it is not simply a matter of writing everything down in some way or another and then filing it away. Procedural documentation should not be a mere formality that ends up gathering dust in the tax firm’s or company’s filing cabinet.
Ideally, procedural documentation is a digital reference tool that is dynamically structured and based on taxonomies. This enables tax inspectors to search specifically for individual data points and complete the audit more quickly. Law firms and companies can keep digital procedural documentation up to date with minimal effort and make it available to staff. With specialised software solutions such as Opti.Tax Documentation, even those new to the field can quickly and easily create living, usable procedural documentation.
Opti.Tax Documentation
How the process documentation software works
In 10 minutes, hsp Managing Director Paul Liese will show you how quickly and efficiently you can create process documentation. This involves using the cloud to connect staff and clients and assign them tasks.
Making the most of the benefits of process documentation
A duty that delivers added value
The consequences of missing or incorrect procedural documentation can vary, although a tax audit and reassessment are often used as a warning. According to paragraph 155 of the aforementioned BMF letter on the GoBD, the absence of or errors in procedural documentation should, in principle, not constitute a formal defect of material significance that would lead to the complete rejection of the accounts. This should apply at least as long as the fundamental traceability and verifiability are not thereby impaired. However, to ensure that no disputes arise at this stage during a tax audit, you should arrange for all necessary documentation to be prepared in good time. It is therefore becoming increasingly important to prepare procedural documentation before a tax audit takes place. This is precisely why we have developed the Tandem Opti.Tax Documentation and Opti.View.
Opti.View supports regular checks of the accounts as part of an internal control system. The results of the macro-supported checks are transferred via an interface to Opti.Tax Documentation and kept as an appendix to the procedural documentation.
The benefits of using Opti.Tax and Opti.View
- Sample procedure documentation: Use templates to save a lot of time
- Procedural documentation in tax consultancy: More than just a duty
- GoBD-compliant procedural documentation: All answers to questions about GoBD
- Opti.Tax Doku solves the challenge: Creating procedural documentation – but how?
- Process documentation software: a systematic and guided approach to digital documentation
Opti.Tax – the process documentation software
Easily create accurate procedural documentation in accordance with GoBD. Record all processes, comply with legal requirements and identify opportunities – with Opti.Tax you’ll get the right software.
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About hsp – Software innovation made in Germany
Since 1991, hsp Handels-Software-Partner GmbH has been developing professional software solutions for tax consultancy and audit firms, as well as for businesses.
Our taxonomy software Opti.Tax has established itself amongst discerning professionals in the DACH region as the reliable, high-performance and long-term solution for electronic invoicing. The digital tools for legally required, GoBD-compliant documentation are particularly popular.
Practical relevance, up-to-date content and genuine service
Our software modules are developed in close collaboration with experienced partner firms such as Energiesozietät GmbH for internal control systems (IKS), ADKL Abels Decker Kuhfuß & Partner mbB for transfer pricing, and Schröder & Partner for the digital pension file. In this way, we ensure that the features in Opti.Tax are tailored to the real-world challenges of day-to-day professional practice.
Regular updates ensure that changes to legislation and new requirements are incorporated into the software in a timely manner. In addition, we support you with a comprehensive range of service and support offerings, e-learning courses, access to the hsp Community, our weekly live broadcast „hsp live at 11“ and much more.
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