Navigating the New Danish Bookkeeping Act 2022

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April 17, 2024

Denmark’s financial landscape is evolving, and this legislative shift is not just a legal obligation but an opportunity for businesses to enhance efficiency and transparency. By aligning with these changes, your company can position itself at the forefront of digital financial management for trade with organisations in Denmark.

On July 1, 2022, Denmark witnessed a significant shift in its financial landscape with the enactment of the new accounting law. Aimed at ushering in a new era of digital financial management, these regulations impact companies obligated under the annual financial statements law, as well as other businesses and associations with a net turnover exceeding £300,000 for two consecutive years.

Embracing Digital Transformation

The core of the new accounting law revolves around the mandate for businesses to adopt digital accounting practices and provide a transparent account of their associated procedures. While the full implementation will span several years, it’s prudent for businesses to proactively plan for the digitisation and automation of their processes, including invoicing.

Expanded Obligations

Previously, the requirement to submit electronic documents extended solely to interactions with the government. However, the new legislation broadens this obligation, encompassing both private and public entities. Notably, parties engaged in B2B transactions have the flexibility to waive the requirement for electronic communication through mutual agreement.

ERP System Approval

Integral to this transformation is the requirement that all ERP systems receive approval from the Danish Business Authority. The approval process is categorised into two segments:

Standard ERP System: If your business utilises what the Business Authority designates as a standard ERP system, characterised by uniform subscription or licensing conditions for all users, the prerequisite is to have your accounting digitised by July 1, 2024.

Specialised Adapters: For businesses employing specially developed or individual adapters within their ERP systems, tailored to enhance quality for specific needs, the mandate is to have accounting digitised by January 2025.

Implications for Danish Businesses

For companies yet to embrace one of the already approved ERP systems, the message is clear: it’s time to consider upgrading or replacing your ERP system. The Business Authority provides a list of approved ERP systems.

Stay tuned for more insights and updates as we navigate the dynamic landscape of financial regulations in the UK, Europe and beyond.

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