Tax & Bookkeeping

Welcome to the Kaern Schools studio. Pull up a chair — there's coffee in the corner and a stack of receipts on the table, because today we're going to make friends with the part of running a company that most founders avoid until it bites them.

Who this is for. You're a founder building a Kaern startup. You don't need an accounting degree. You need to keep clean books, understand what the tax authorities expect, and know when to pick up the phone to a professional.

What you'll walk out with. By the end you'll be able to record transactions correctly, read a basic chart of accounts, handle VAT (USt) and invoices the German/EU way, understand the major taxes that hit a company, run the basics of payroll, and work productively with an accountant at year-end.

Your tutor. I'm Fin. I've kept books for market stalls and for software companies, and I promise you the principles are the same — only the zeros change.

Disclaimer. This course teaches principles and habits, not advice for your specific situation. Tax law changes, thresholds move, and your facts are unique. Whenever you see Confirm with a tax advisor (Steuerberater), take it literally. I am a teacher, not your advisor.

Module 1 — Bookkeeping Basics & Records

Learning objectives

• Explain what bookkeeping is and why it is legally and practically necessary.
• Distinguish a business transaction from personal spending.
• Apply the rule "no booking without a document" (keine Buchung ohne Beleg).
• Organise receipts so they survive a German retention period (typically up to 10 years — confirm with a tax advisor).

Lesson 1.1 — What bookkeeping actually is

Teaching script (Fin): Imagine your company is a ship and money is the water it floats in. Bookkeeping is the logbook — every litre that comes aboard and every litre that drains out, written down the moment it happens. Without the log, you can still sail for a while, but the day a storm hits — a tax audit, an investor, a cash crunch — you have no idea where the leaks are.

Why does it matter? Because in Germany and across the EU, a business is legally required to keep orderly records, and because you cannot steer what you cannot see. Founders love the product and hate the logbook; the ones who survive learn to love the logbook a little.

Bookkeeping is simply: capture every transaction, attach its evidence, and classify it so it can be summed up later into "what did we earn, what did we spend, what do we owe." That's it. Everything fancy is built on those three moves.

Here's my question to you before we go on: think about the last five times money left your business account. Could you, right now, point to a document proving why for each one? Confirm retention specifics with a tax advisor.

Lesson 1.2 — No booking without a document

Teaching script (Fin): There's an old German bookkeeping proverb: Keine Buchung ohne Beleg — no entry without a voucher. Think of a document as the ticket stub for every entry in your logbook. The entry says "we spent €119 on software." The document — the invoice — proves it, names the supplier, and crucially shows the VAT, which you may be able to reclaim.

Why so strict? Because an auditor doesn't take your word for it, and frankly neither should you six months later when you've forgotten what "AWS €119" was for. The document is your memory and your defence.

Documents come in two flavours: outgoing (invoices you issue to customers) and incoming (invoices and receipts from suppliers). Both must be kept, both must be readable years later, and digital copies are generally fine if stored properly — but the rules on digital archiving (GoBD in Germany) are specific. Confirm your archiving setup with a tax advisor.

A receipt crumpled in a jacket pocket is a future headache. A receipt photographed and filed the same day is a quiet win.

So tell me: where do your paper receipts go the moment you receive them — and is that a system, or a hope?

Worked example

A founder buys a laptop for the company. Cost: €1,000 net + €190 VAT = €1,190 total. Correct handling:

• Document: keep the supplier invoice showing seller, your company, date, net, VAT (19%), gross.
• Booking: record €1,000 as an asset/expense (depending on rules), €190 as input VAT (Vorsteuer) to reclaim, €1,190 as money out of the bank.
• Filing: store the invoice in your accounting tool tagged "hardware," same week.

Result: when the VAT return is prepared, the €190 is already captured and provable.

Hands-on exercise

Gather every business document from the last 30 days (bank statements, invoices, receipts). Create three folders — Income, Expenses, Bank — physical or digital. File each document. List any transaction on your bank statement that has no matching document. That list is your first real bookkeeping task: hunt down the missing tickets.

Common mistakes

1. Mixing personal and business money — using the company card for groceries. Open a dedicated business account and keep a hard line.
2. Throwing away "small" receipts — a €4 coffee with a client still needs its stub if you book it.
3. Filing once a quarter — by then you've forgotten what half the entries were. File weekly.

Check for understanding

1. What does keine Buchung ohne Beleg mean, and why does it protect you?
2. Name the two flavours of documents and give an example of each.
3. Why is a dedicated business bank account a bookkeeping decision, not just a banking one?