Full Accounting

Limited-liability companies (sp. z o.o.), limited partnerships (sp.k.) and limited joint-stock partnerships (S.K.A.) are unconditionally required to maintain financial books under the full accounting system. Businesses operating in other legal forms may be exempt from this requirement if their annual revenue does not exceed the equivalent of EUR 2 million. The primary legal act governing bookkeeping is the Polish Accounting Act (ustawa o rachunkowości).

The key accounting instrument in the full accounting system is the chart of accounts, whose general structure is based on a model developed through both practice and academic literature. However, the specifics of each company require the chart of accounts to be refined and adapted to the particular characteristics of the business.

An undeniable advantage of maintaining full financial books — as opposed to simplified bookkeeping — is that it enables the accountant to monitor settlements with contractors and institutions on an ongoing basis. The books record not only the company’s costs and revenues but also cash flows, primarily bank transfers and cash transactions.

The purpose of maintaining full financial books is to prepare the mandatory financial statements, which include, among others, a balance sheet and a profit and loss account. These reports allow for a detailed assessment of the company’s asset and financial position and enable regular monitoring.