How do I add expenses to bookkeeping?

As an OP Light Entrepreneur, you can enter your business expenses in bookkeeping under your Business ID. It is worth adding expenses to bookkeeping, because they are deducted from the business’s taxable income. Deductible expenses are taken into account in your year-end tax return. If your income is reduced by expenses, you may receive a tax refund at the end of the year. Expenses subject to VAT also reduce the amount of VAT you must pay.

What can I add as expenses?

We accept small purchases with a purchase price of under 1 200 euros (VAT 0 %) and long-term assets that does not exceeds the total value of 30 000 €.

Read this article for further information on acceptable expenses:
Tax-deduction of business purchases

Our service includes single-entry bookkeeping, which is a lighter form of accounting. Please note that OP Light Entrepreneur does not include a balance sheet, but we offer deduction of long-term assets with certain limitations. For example, our service does not include bookkeeping for buildings, real estate, vehicles, heavy machinery and the related expenses.

How do I record expenses in bookkeeping?

Select the New → Expense tab from the navigation view. Start by reading the instructions on deductible expenses. If they indicate that an expense is deductible, start recording expenses by adding the receipt as an attachment.

Adding a receipt

The slip or order confirmation provided by the vendor counts as a receipt. A proper receipt:

  • Includes the vendor company’s name and Business ID
  • Includes the price paid for the purchased product or services
  • Separately states the VAT rate and amount of VAT paid
  • Includes the date of purchase
  • Is e.g. the original bill or till receipt

Date of expense

Add the date of payment, i.e. the date on which the expense was paid. If you made the purchase before registering with our service, allocate the expense to the date on which you registered. In the case of goods, the purchase expense is either the original purchase price or the lower, probable purchase price at the time when you became a private trader.

Adding expense rows

You can add the number of expense rows you need to record purchases. Record expenses with different VAT rates on different rows. So, if you have several products or services, you do not need a separate row for each of them.

State the type of expense in the description field. This could be the make and model of a purchased product.

In the price field, add the amount you paid to the vendor, either including or excluding VAT.

Expense category

You can select one of the following as the type of expense:

  • Product: the most commonly purchased type of item, such as a phone or goods for selling to a customer.
  • Service: this could be software, a repair service or other intangible asset
  • Rent: select this option if you have rented business premises for your company, or are hiring a product.
  • Representation: 50% of expenses related to hospitality for customers, business acquaintances or other persons of significance to your business are tax deductible in bookkeeping for a business ID. VAT on expenses cannot be separately deducted. Add details about the participants, and an explanation of how the expenses are business related, to the expense description.
  • YEL pension insurance: if you have self-employed persons’ pension insurance (YEL) you can add it to expenses by selecting this option.

After selecting the expense type, add further details on the purpose of the purchase:

  • Product and service purchases for sales purposes: you sell the product or service on to a customer. Select this expenses option if you use products in conjunction with a service, or resell products to customers as part of a finished product/service, or separately.
  • Other business expenses: the purchase will be used by the company and is not directly sold to customers.

Country of purchase

You can make purchases from Finland or abroad. Select the place of purchase based on the country in question. The country of purchase affects how the related VAT is treated in bookkeeping.

Note! When purchasing items from vendors located abroad, provide the vendor with your VAT identification number!

For further details, see the VAT identification number page on the Business Information System’s website.

VAT rate

The country of purchase sets the VAT rate to be used. Always use the VAT rate presented on the bill, but in the case of a foreign purchase, the VAT rate at which the good would have been bought in Finland. If no VAT rate is available for the expense, select 0% VAT.

In the case of purchases made within the EU, check that the receipt includes both your and the vendor’s VAT identification number. The receipt should also indicate reverse charge VAT and state that the total amount is VAT-free.

If the receipt does not include the required information, give Finland as the country of origin and VAT of 0%.

Partial deduction of expenses

If you deduct only some expenses, you must state how the expenses are business-related, and the amount used for business purposes, in the description field. For example, you have a phone subscription bill of 30 € (including VAT), 50 % of which is business-related. In such a case, add “Company’s phone bill. Business-related 50 %." in the description field. Add only the deductible amount, i.e. 15 €, even if the total on the invoice was 30 €.

Adding representation expenses

Add details on the representation event in the description field and then the participants’ first and last names. Select "representation expenses" as the expense type and add the total amount. Our system will automatically deduct 50 % from the total amount as representation expenses. You do not need to make a separate deduction.

Recording of expenses

When all information has been checked and added as instructed, you can record the expenses.

Our accountant will check the expenses within a few weeks. After this, the expenses will also appear in your bookkeeping. Please keep hold of the original expenses receipt until then.

Our accountant will send you an email message if the expense needs to be corrected. If this is the case, you can correct it on the “bookkeeping” tab. Click to open expenses and make the required corrections.

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