Business Accounting Records: Complete Legal Obligations

Introduction

Maintaining business accounting records constitutes an indispensable pillar of business management in France. Whether it is a micro-enterprise, a very small enterprise (TPE), a small or medium-sized enterprise (PME) or a sole trader, every structure is subject to strict accounting obligations defined by the Commercial Code, the General Accounting Plan (PCG) and the General Tax Code. These obligations are not limited to simple accounting entry: they encompass the preservation of supporting documents, the maintenance of compulsory registers, the issue of compliant invoices and the production of annual financial statements. This comprehensive guide details all applicable rules, thresholds to know and best practices to legally secure your activity whilst optimising your financial management.

1. Compulsory accounting registers

Article L. 123-12 of the Commercial Code requires every trader to maintain three fundamental registers: the journal, the general ledger and the inventory book (the latter abolished for financial years opened since 2016, but the inventory document remains compulsory). The journal records chronologically all transactions affecting the company's assets, whilst the general ledger breaks down these entries by account.

For micro-entrepreneurs, the regime is simplified: only a record of receipts is required, supplemented by a register of purchases for merchandise sales activities (article 50-0 of the CGI). These registers must be kept without blanks or alterations, and may now be digitised in accordance with the decree of 22 March 2017, provided that the authenticity, integrity and readability of the data are guaranteed throughout the entire legal retention period.

Negligence in maintaining these registers can result in the tax authority rejecting the accounts, with serious consequences: arbitrary assessment, surcharges and penalties.

2. Invoices and supporting documents: compliance and retention

Every invoice issued must comply with the compulsory particulars listed in article 242 nonies A of Schedule II of the CGI and article L. 441-9 of the Commercial Code: identification of the parties, SIREN number, intra-community VAT number, precise description of goods or services, VAT rate and amount, payment terms and late payment penalties.

Since the Sapin II Act (Act No. 2016-1691) and as part of the electronic invoicing reform provided for by Ordinance No. 2021-1190, French companies will gradually have to switch to mandatory electronic invoicing via the Chorus Pro platform or partner digitisation platforms (PDP) between 2026 and 2027.

Supporting documents (invoices, contracts, bank statements, delivery notes) must be retained for 10 years from the end of the financial year (article L. 123-22 of the Commercial Code), and 6 years for tax documents (article L. 102 B of the LPF). A missing supporting document can invalidate an accounting entry and result in the loss of deductibility of an expense.

3. Accounting entry and applicable standards

Accounting entry must comply with the General Accounting Plan (ANC regulation No. 2014-03) which defines the accounts nomenclature and valuation rules. PMEs exceeding two of the following three thresholds (€4 million in assets, €8 million in turnover, 50 employees) must produce complete annual accounts: balance sheet, income statement and notes.

Listed groups or those making a public offering of securities apply IAS/IFRS standards in accordance with EC Regulation No. 1606/2002. Although very small enterprises and SMEs are not directly concerned, those operating with international partners or seeking funding should familiarise themselves with them.

Entry must be carried out in accordance with the double-entry principle, with a reliable audit trail (article L. 13-0 C of the LPF). The accounting software used must comply with the FEC format (Accounting Entries File) required in the event of a tax audit.

4. Specific obligations according to status

Micro-enterprises benefit from ultra-simplified accounting but must invoice with the mention "VAT not applicable, art. 293 B of the CGI" below the exemption thresholds. Sole traders under the actual regime must maintain complete commercial accounts. Very small enterprises and SMEs incorporated as partnerships (SARL, SAS) must also file their annual accounts at the registry of the commercial court within one month of their approval (article L. 232-23 of the Commercial Code).