Business Accounting Management: Complete Legal Obligations

Introduction

Maintaining accounting records is an essential pillar of business management in France. Whether it is a micro-enterprise, small business, SME or self-employed entrepreneur, each structure is subject to strict accounting obligations defined by the Commercial Code, the French General Accounting Plan (PCG) and the General Tax Code. These obligations are not limited to simple accounting entries: they encompass the preservation of supporting documents, the maintenance of mandatory registers, the issuance of compliant invoices and the production of annual financial statements. This comprehensive guide details all applicable rules, key thresholds and best practices to legally secure your activity while optimizing your financial management.

1. Mandatory accounting records

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

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

Negligence in maintaining these records can result in the tax administration rejecting your accounts, with serious consequences: arbitrary taxation, surcharges and penalties.

2. Invoices and supporting documents: compliance and retention

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

Since the Sapin II law (law n° 2016-1691) and as part of the e-invoicing reform provided for by ordinance n° 2021-1190, French companies will progressively have to switch to mandatory e-invoicing via the Chorus Pro platform or partner digitalization 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 fiscal 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 eliminate the deductibility of an expense.

3. Accounting entries and applicable standards

Accounting entries must comply with the French General Accounting Plan (ANC regulation n° 2014-03) which defines the chart of accounts and valuation rules. SMEs exceeding two of the following three thresholds (€4 million balance sheet, €8 million revenue, 50 employees) must produce complete annual accounts: balance sheet, income statement and notes.

Listed groups or those making a public offering apply IAS/IFRS standards in accordance with EC regulation n° 1606/2002. Although SMEs/small businesses are not directly concerned, those operating with international partners or seeking funding should familiarize themselves with them.

Entries must be made according to the double-entry principle, with a reliable audit trail (article L. 13-0 C of the LPF). Accounting software used must comply with the FEC format (File of Accounting Entries) required in case of tax inspection.

4. Specific obligations depending on status

Micro-enterprises benefit from simplified accounting but must invoice with the mention "VAT not applicable, art. 293 B of the CGI" under the exemption thresholds. Self-employed entrepreneurs on the actual regime must maintain complete business accounting. SMEs in corporate form (SARL, SAS) must also file their annual accounts with the commercial court registry within one month of approval (article L. 232-23 of the Commercial Code).