02

DGTAX Handbook

Accounting and Bookkeeping

Operational guide dedicated to company accounting management: activities, deadlines, and responsibilities to ensure correct accounting in compliance with Italian regulations.

HANDBOOK 02

ACCOUNTING AND BOOKKEEPING

General ledger accounting and preparation of mandatory documentation

1. SERVICE DESCRIPTION

Our Accounting and Bookkeeping service manages an Italian entity’s ledger preparation needs, from recording of documents to preparing the legally accounting-relevant required books. This is the operational core of the business administration department, providing a systematic track of all P&L and balance sheet economic, asset-related, and financial transactions.

The fundamental requirement is that accounts be updated on a regular basis, and that they include all the transactions that are relevant from an economic standpoint to be able to determine the profit or loss of the year. The principle that governs Italian accounting is that of accrual of costs, as opposed to that of cash expenditure.

We ensure your accounts are up-to-date, prepared accurately, and in full compliance with Italian civil and tax law (including key regulations such as Legislative Decree 139/2015, Civil Code arts. 2214–2220, and DPR 600/1973).

Since accurate and consistent bookkeeping is the foundation for all civil law related, tax filings and annual financial statements, a precise system is crucial to avoid costly errors, penalties, or delays. We use certified, continuously updated software to keep pace with all regulatory and digital changes.

2. ACTIVITIES

The service includes all necessary operations for accurate bookkeeping, including but not limited to:

  1. the general ledger recording of:
  • purchase and sales invoices;
  • credit and debit notes;
  • cash and bank journal entries;
  • salaries;
  • depreciation of assets;
  • foreign exchange calculations;
  • year-end accruals and adjustments.
  1. the updating of the records from a VAT standpoint – including the management of periodic VAT settlements and the preparation of VAT ledgers
  2. the calculation of withholding tax due on professional service providers’ invoices
  1. the yearly chart of accounts updates, and verification of reconciliation between the accounting ledger and fiscal documents.

Upon activation of the REPORTING service, our activities also include the preparation of financial extracts and monthly/quarterly reports, which are valuable for management control or for the parent company info integration needs.

All entries are made based on the documents provided by the customer, following a formal verification of their correctness and completeness. Our support also extends to the management of auxiliary obligations, such as the preparation of the book of assets, general ledger and journal ledger.

3. REQUIREMENTS AND DEADLINES

Bookkeeping must be updated on a regular schedule, based on the company’s volume of business and accounting regime.

VAT entries must be completed within 15 days from the date of the transaction; VAT payments are handled on a monthly or quarterly basis.

Withholding tax is typically due within the 16th day of the month following that of the relevant transaction (payment of an invoice subject to withholding tax).

Accounting registers must be preserved and, if required, printed or made available in digital format by the deadlines set for the income tax return filing (typically, within 60 days of the deadline).

At the end of the fiscal year, we perform the year-end closing procedure (consisting in the accrual of costs that have not been documented by invoices or cost notifications, such as personnel-related yearly costs, depreciations and amortizations, etc.) and prepare a preliminary Trial Balance for customer review and approval. 

The main deadlines are therefore:

  • monthly (entries, VAT and withholding tax calculations);
  • quarterly (reconciliation checks and reporting);
  • annually (financial statement closing).

4. WHAT THE CUSTOMER SHOULD DO

The customer should provide all necessary accounting documentation in a timely and complete manner, on a monthly basis. This includes 

  1. electronic invoicing portal access / SDI invoices
  2. accounting posting reports arising from payroll processes
  3. issued invoices (not in the SDI electronic invoicing system) 
  4. supplier invoices received (not in the SDI electronic invoicing system)
  5. receipts relating to any payments not supported by invoices
  6. bank statements with details of payments made 
  7. petty cash sheet with supporting documentation
  8. approved expense reports – prepared by employees – with supporting documentation
  9. credit card account statements with related justifications 
  10. details of payments made on behalf of the Italian entity by HQ or group companies
  11. details of intercompany transactions

It is crucial that documents are shared with us according to agreed-upon deadlines (e.g., by the 5th calendar day of the following month) and in the specified format (shared folder, portal, or dedicated email).

We should be promptly notified of any special operational details (e.g., intra-community sales, import operations, lease-purchase contracts) and provide the necessary data for any new customer or supplier master records.

Active cooperation is quintessential to ensure accurate and timely bookkeeping. Failure to provide documents or communications may result in incomplete registrations, requiring subsequent adjustments.

5. WHAT WE DO

Our team handles the recording and auditing of all received documents, verifying the correct accounting and fiscal classification of every transaction. We manage VAT ledgers, periodic settlements, reconciliation statements, and year-end adjustments.

At the end of each period, we provide updated VAT ledgers and, upon request, an updated trial balance (upon activation of the REPORTING service). We also manage the preparation of annual closings, providing the necessary data for financial statements and tax returns.

All activities are performed in compliance with legal deadlines and data security standards (GDPR).

We assign a dedicated contact person to every customer. This representative is available to provide clarifications, offer operational guidance, and directly interface with the client contact – or the parent company.

6. OUTPUTS PROVIDED

Following the bookkeeping activities, various documents and reports are made available to the customer through our systems: journal ledgers and general ledger, periodic VAT registers, VAT settlement statements, customer/supplier account statements and depreciation schedules.

In addition, customized reports for management or the parent company can be prepared in Excel or PDF format.

All documentation is digitally archived on our servers according to the privacy policy, with customer segregation of information. 

Every recorded transaction is traceable and preserved in compliance with legal requirements. At the end of the fiscal year, a complete financial summary is provided, detailing all year-end adjustments, which is essential for drafting the statutory and fiscal financial statements.

7. NOTES AND RECOMMENDATIONS

To ensure an efficient accounting workflow, it is essential to respect the deadlines for document submission and maintain constant communication with the accounting team.

We recommend avoiding fragmented or late submission of documents, as this can compromise data quality and slow down fiscal compliance. It is also advisable to perform periodic controls on customer and supplier master data to keep the database updated.

In the case of special transactions (shareholder loans, leasing, factoring, etc.), it is appropriate to notify the firm in advance to ensure correct recording.

Accounting is also a management tool: maintaining a continuous dialogue with your accountant allows you to obtain valuable information for monitoring business results and for tax planning.

8. REGULATORY REFERENCES AND USEFUL LINKS