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What should you pay attention to when keeping a revenue and expense ledger?
The revenue and expense ledger (KPiR) is a simplified form of accounting for recording business transactions connected with an enterprise or business entity. It is a register of revenue and costs associated with running a business.The KPiR should be opened on 1 January of each tax year or on the day business begins during the tax year.
The revenue and expense ledger may be kept on paper or electronically. Paper records must have numbered pages and be chronological; electronic records should be stored by settlement period, also in chronological order. All KPiR entries should be made correctly and reliably, in accordance with applicable regulations, as required by the regulation on keeping the KPiR.
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Who is required to keep a KPiR?
Simplified accounting in the form of a KPiR may be used by:
- Natural persons earning income from non-agricultural business activities who choose the general income tax rules or flat tax.
- General partnerships, civil partnerships and professional partnerships, provided their net revenue in the previous financial year did not exceed the equivalent of EUR 2,000,000 in Polish currency (the 2023 limit was PLN 9,654,000.00). Above this threshold, these entities must keep full accounts.
What information should be entered in the KPiR?
The ministry's model has 17 columns, to be completed as follows:
| Column number | Information to enter |
| 1 | Sequential number of the entry in the ledger |
| 2 | Date from the document on which the entry is based |
| 3 | Invoice number or other transaction evidence number |
| 4 | Details of counterparties involved in the transaction (counterparty name) |
| 5 | Details of counterparties involved in the transaction (counterparty address) |
| 6 | Description of the business event, e.g. purchase of materials or payment of wages |
| 7 | Sales revenue |
| 8 | Other revenue, e.g. sale of assets or contractual penalties received |
| 9 | Sum of revenue in columns 7 and 8 |
| 10 | Purchase cost of materials and goods at their purchase prices |
| 11 | Additional purchase costs, e.g. transport, loading and unloading, insurance |
| 12 | Gross remuneration paid to employees |
| 13 | Other costs not included in columns 10–12, e.g. rent, electricity and employer-funded employee insurance contributions |
| 14 | Sum of costs in columns 12 and 13 |
| 15 | Other business events not listed in columns 1–13 |
| 16 | Costs related to research and development activities |
| 17 | Notes on the contents of entries in columns 2–16. This column may also be used to record advances collected or other important information |
Which accounting documents should be entered in the KPiR?
● VAT invoices, including VAT RR invoices● customs documents,● bills,● other documents confirming actual business transactions (accounting notes, transfer documents, proof of payment, fiscal reports, etc.).
The following information must be included in those documents:
- Precise identification of the issuer or the parties (names and addresses) involved in the business transaction.
- The date the document was issued and the date or period of the business transaction.
- Description of the business transaction and its value.
- The first and last name of the person authorised to issue the invoice.
- A number or other designation allowing the document to be linked to the accounting entries made on its basis.
When keeping an electronic revenue and expense ledger, you must:
- Have detailed written instructions for the computer program used to keep the ledger (the rules do not specify exactly how these instructions must be worded, but they may take the form of a manual describing the program).
- Use software providing immediate access to entries and allowing all data to be printed in chronological order in accordance with the adopted ledger template.
- Store data in a way that protects it from destruction or distortion.
Storing the KPiR
As a rule, the KPiR must be kept at the company's registered office or place of business. If you outsource keeping the KPiR to an accounting firm, you must keep a sales register at the company's registered office or place of business. The register should include the sequential entry number, the date on which revenue not documented by invoices or bills was earned, and the amount of that revenue. As mentioned earlier, it may be kept on paper or electronically. The ledger and documentation should be retained for five years from the end of the calendar year in which the deadline for paying the income tax settled using the ledger expired. If you record sales using a cash register, you do not need to keep a separate sales register.
How should business costs be recorded in the KPiR?
- Accrual method – direct costs are those attributable directly to particular revenue. They are generally recorded in the year in which the corresponding revenue is earned, but must be recognised before filing that year's tax return. Examples include purchases of machinery and equipment used in the company and production materials.
- Cash method – indirect costs are those that cannot be unambiguously allocated to particular revenue. They are usually recorded on the date the supplier issues the invoice. Examples include rent, office maintenance, training, advertising and promotional activities.
If this article interested you, explore our accounting services and see how we can help:
Summary
We hope the above information will make it easier and clearer for you to keep a revenue and expense ledger. If it still seems complicated or simply takes too much time, we invite you to use our services. Take a look at our offer.
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