Bookkeeping Procedure in Denmark 2025
- 2 minute read
- Finance & Accounting
Descriptions of bookkeeping procedures have become a central topic for businesses in Denmark. With new legal requirements, it is crucial to have clear descriptions on how your company handles accounting and record keeping. Let’s dive into what you need to know and how you can ensure your company meets the requirements.
Who is covered by the bookkeeping procedure requirements?
Companies must prepare a description of their procedure for recording transactions and for storing accounting records.
The requirement for a description of the bookkeeping procedure applies to:
- Companies that must submit an annual report according to the Danish Financial Statements Act (accounting class B-D)
- Companies with an annual net turnover of more than DKK 300,000 in two consecutive income years
Content of the bookkeeping procedure
Your bookkeeping procedure must, at a minimum, describe procedures for:
- How you continuously ensure that all of your company’s transactions are recorded
- The method for securely storing accounting records
- Which employees are responsible for these procedures
The full requirements can be found in the Danish Business Authority’s template. The description of the bookkeeping procedure must be included in the company’s overall accounting records. This also means that the description must be stored in accordance with the Accounting Act – and thus you may be asked to hand over the material to the authorities during controls.
Deadlines and implementation
Companies have been required to comply with the requirement for written accounting procedures in their first new fiscal year starting after October 1, 2022.
For companies following the calendar year as their fiscal year, the description should be available by January 1, 2023.
Approved digital bookkeeping systems
From 2024, the use of approved digital bookkeeping systems is required for many companies. If your financial year follows the calendar year, digital accounting became a requirement on July 1, 2024.
This also means that your accounting procedures should now be updated to accommodate this.
These systems must:
- Support continuous registration of transactions
- Meet specific IT security standards
- Enable automation of administrative processes
In January 2024, the Danish Business Authority published a list of approved bookkeeping and ERP systems. If you use a system that is not on this list, your system ought to meet the requirements no later than January 1, 2025.
You can see the requirements here, and see the list of approved systems here.
Management responsibility
Management has a responsibility to ensure that the company complies with the new requirements and implements the necessary procedures in a timely manner. It is crucial to take this responsibility seriously to avoid potential sanctions.
The new law gives the Danish Business Authority expanded powers to monitor compliance and issue higher fines for non-compliance.
Getting started with the description of bookkeeping procedures
1. Use a template:
The Danish Business Authority has a Word template which can be a good starting point, especially for smaller businesses in accounting class A and B. Larger businesses, e.g. accounting class C and up, might need more extensive descriptions.
2. Descripbe your practices:
Be specific in the description of hos you handle bookkeeping and store materials.
3. Be detailed:
The more detailed your description is, the better. Both for internal and external use.
4. Be ready for digital bookkeeping:
Most companies became subject to the requirements regarding digital bookkeeping systems in 2024. But more businesses became subject to this on January 1, 2025, and in 2026 this will apply to personally owned businesses with an annual net turnover of more than DKK 300,000 in two consecutive income years.
