Accounting is an integral part of doing business on behalf of an Estonian company whose purpose is to keep records and to get an overview of the economic results and financial situation of the company.
All companies and subsidiaries of foreign companies operating in Estonia are subject to accounting. The estonia accounting of each company must conform to government standards to ensure that the results are comparable and understandable.
- Accounting should provide an accurate, objective and comparable picture of a company’s financial position, performance and cash flows.
- All business transactions must be documented.
- All business transactions must be recorded in the accounting software.
- Each company must prepare and submit an annual report to the Commercial Register for the previous year until June 30 of this year.
- All accounting documents must be archived for at least 7 years.
- Describe the necessary chart of accounting accounts, describing the content of these accounts
- Regulate the documentation and recording of transactions
- Establish the circulation and storage of primary documents
- Regulate the maintenance of accounting records
- Record income and expenditure in the profit and loss statement
- Describe company inventory, assets and liabilities
- Define accounting policy, reporting procedure and other accounting
Estonia has two business accounting systems – accrual and cash accounting.
- Accounting in Estonian companies is conducted on an accrual basis, but entrepreneurs – natural persons are allowed to keep accounting on a cash basis.
- In the case of accrual-based accounting, transactions should be recorded as they occurred, regardless of whether the money was received or paid.