Requirements for Specially-made Digital Bookkeeping Systems

As you may know (and if you don’t, make sure to check our post here from February before continuing), any company operating in Denmark must implement a digital bookkeeping system. This should be done as soon as possible, and no later than 1. July 2024 if your financial year follows the calendar year.

In January 2024 the Danish Business Authorities published a list of approved bookkeeping and ERP systems, and now, they have published the specific requirements for specially-made bookkeeping systems as well. And it is crucial that your system complies with these requirements, as the penalties are rather severe.

Who do the bookkeeping system requirements apply to?

You may be thinking “I’m already using a digital bookkeeping system – but what do I do if it is not on the list of approved systems?”. Unfortunately, it is completely up to management to make sure that the used system is compliant with the requirements. So you can’t blame the provider of this system. Make sure to double-check ALL the requirements, if one of the following applies to you:

Using a bookkeeping system NOT on the list.
Using a specially-made or developed bookkeeping system.
 Using a foreign system not marketed in Denmark.

Should this apply to you, your management is responsible for ensuring that your used system meets the requirement set by the Danish government no later than 1 January 2025 (if your financial year follows the calendar year).

What is a “specially-made bookkeeping system”?

According to the Danish Bookkeeping Act, a digital bookkeeping system is defined as:

A digital service or software that provides features for businesses to record transactions and store records and supporting documents, or at least a complete backup copy, on a server of a provider or other third party.  

So, should your system fall within one of the categories mentioned above, you’ll need to thoroughly go through the requirements – as it is your responsibility to be compliant.

Requirement to specially-made bookkeeping systems.

1) The company must ensure that its digital bookkeeping system contains fields for the use of the following conditions for each transaction:

    • Transaction date (e.g. payment date, purchase date, etc.).
    • Amount.
    • Voucher number.
    • Transaction text.
    • The transaction day rate or other conversion factors, if the registration is made in anything other than DKK.

2) The company must ensure that its digital bookkeeping system provides each booked transaction with the following information:

    • Registration date.
    • Consecutive transaction number or ID.
    • Initials (or the like) on the persons or program and others who have booked the transaction.

3) The company must ensure that its digital bookkeeping system saves changes to the bookkeeping. An example could be by correcting incorrect transactions with new transactions and ensuring that users cannot change, backdate, or delete posted transactions in the system.

4) The company must ensure that its digital bookkeeping system can store documentation of a booked transaction regarding purchase and sale, which contains the following information:

    • Issue date.
    • Nature of delivery.
    • Amount.
    • Sender and received, including name, address, and CVR no. or SE no.
    • Information regarding the side of the VAT amount.
    • Payment details.

5) The company must at least once a week take a safety copy of all booked transactions and vouchers (full safety copy) unless no bookings have been made since the last safety copy. The safety copy must be stored with an unrelated party which must be expected to comply with recognised IT security standards on a server in an EU or EEA country. A recognized IT security standard could be e.g. ISO 2700, DORA, and NIS2.

6) The company must further ensure that its bookkeeping system;

    • Via Nemhandel in OIOUBL format can automatically send and receive electronic invoices and credit notes, and can send an application response upon receipt of an electronic invoice according to the applicable standard, which is published on the Danish Business Authority’s website
    • In Peppol BIS format can automatically send and receive electronic invoices and credit notes, and can send message level responses and invoice responses upon receipt of an electronic invoice according to the applicable standard, which is published on the Danish Business Authority’s website.
    • Supports the sharing of data by making it possible to generate an SAF-T file, as defined by the Danish Business Authority, according to the applicable standard, which is published on the Danish Business Authority’s website.
    • Supports reconciliation of the company’s accounting with the company’s bank account.
    • Clearly highlights differences if a transaction is not reconciled with the company’s bank account.

The requirements can also be found here.

Consequences of non-compliance.

Once again, it is up to management to ensure that the company’s bookkeeping system complies with these – rather technical – requirements. And that can be a tough nut to crack for someone without the technical knowledge!

And the authorities are not messing around. This is why they with the new legislation have increased the size of the fines significantly. Now, you can be fined up to DKK 1,5 million for non-compliance, depending on the company’s revenue and the severity, duration, and frequency of the infringements.

bookkeeping system fines

In the event of particularly extensive infringements of several provisions and obligations relating to (digital) bookkeeping and digital bookkeeping systems, heavier fines are imposed. The penalty is meted out by the courts after an assessment of the circumstances of the individual case (see the table shown above).

Occasional or single infringements can also be punished, depending on their materiality. But it will particularly be relevant if such a violation has decisive economic significance This could include failure to register or store accounting material relating to a contract that constitutes a significant part of the company’s turnover. 

What does it mean for you?

All companies using a system not on the approved list will be monitored by The Danish Business Authorities. Should there be indications of any significant risks that a bookkeeping system does not comply with the requirements for such digital bookkeeping systems, controls will be initiated. This will especially be relevant in cases where there are indications of increased risk of significant offenses in general.

The Danish Business Authorities may also request:

Any information and accounting material necessary to carry out such a control to determine whether the bookkeeping system meets the requirements.

Material from the company’s management or auditor / former auditors, who are required to provide the requested material.

An auditor to provide a statement of whether the company’s bookkeeping system complies with the requirements – and note that this would be on the cost of the company.

In the worst case, the company could go into forced dissolution, if it does not provide the requested information.

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At mighty admins, we can assist you with:  

Bookkeeping, reporting, and reconciliation of your Danish Branch or company.
Preparing an annual wheel of filing and payment deadlines with the local authorities.
Handling your Corporate Administration from A-Z, so you never have to think about important filing and payment deadlines. 

mighty admins also offers a registered address (domiciliation) to clients at favorable prices with up to a 25% discount compared to other providers in the market.

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