How to Make Older ERP Systems Compliant with the New Danish Bookkeeping Act

How to Make Older ERP Systems Compliant with the New Danish Bookkeeping Act

The New Danish Bookkeeping Act, enacted in 2022, marks a significant shift towards digitalisation in accounting practices for businesses in Denmark. This legislation requires companies to use digital bookkeeping systems that meet specific standards, enhancing transparency, reducing fraud, and improving efficiency.

For businesses using older ERP (Enterprise Resource Planning) systems like SAP and Microsoft Dynamics, compliance with this act is crucial to avoid penalties and ensure operational continuity.

Compliance matters because it not only ensures legal adherence but also helps businesses streamline their financial processes. The act impacts all Danish businesses that are subject to bookkeeping obligations, including permanent establishments of foreign companies. For companies without an obligation to file an annual report, the rules apply from 1 January 2026, provided the business has had a net turnover exceeding 300.000 DKK in two consecutive years.

This blog explains how to make older ERP systems compliant with the New Danish Bookkeeping Act, why businesses need to upgrade or integrate compliance tools, and what steps to take to meet the digital bookkeeping requirements in Denmark.

Key Requirements of the New Danish Bookkeeping Act

The New Danish Bookkeeping Act sets out specific digital requirements that all businesses must follow. Companies with older ERP systems must ensure they meet these new compliance rules.

Digital Bookkeeping: Mandatory Use of Digital Systems

All businesses must record and store transactions digitally.

The act mandates the use of digital systems for recording and storing financial transactions. This means that all financial transactions must be automatically recorded in an approved digital system.

Additionally, the bookkeeping software must be registered with The Danish Business Authority (Erhvervsstyrelsen). Manual or paper-based accounting methods are no longer acceptable.

E-Invoicing: Sending and Receiving Invoices in OIOUBL or Peppol BIS Formats

All invoices must be sent and received in Peppol BIS or OIOUBL format, which allows for structured electronic invoicing (NemHandel).

In Denmark, all invoices must be sent and received in either Peppol BIS or OIOUBL formats, which enable structured electronic invoicing through platforms like NemHandel. This means that businesses must use Peppol or NemHandel for sending invoices, and these invoices must be stored digitally in a searchable format.

SAF-T Compliance: Generating SAF-T Files for Authority Requests

The Standard Audit File for Tax (SAF-T) is a standardised format used for financial reporting. Businesses must be able to generate SAF-T files upon request from The Danish Business Authority (Erhvervsstyrelsen), which oversees compliance with the Bookkeeping Act. Erhvervsstyrelsen is The Danish Business Authority, not a tax authority. The Danish Tax Agency is Skattestyrelsen.

Your ERP system must be capable of producing SAF-T reports in the correct format. Additionally, SAF-T data must be stored securely and be easily accessible for audits.

To ensure comprehensive financial compliance, it is also important to understand other tax-related regulations in Denmark. For guidance on corporate income tax, dividend tax, and dividends for ApS and A/S companies, read our blog Corporate Income Tax, Dividend Tax and Dividends for ApS and A/S in Denmark in 2024.

IT Security: Ensuring Data Security, Backups, and User Access Management

To comply with the New Danish Bookkeeping Act, businesses must implement robust data security measures, including data encryption to prevent unauthorised access, automatic system backups to protect against data loss, and user access management to ensure that only authorised staff can handle financial data.

Digital Document Archive: Storing Invoices and Transaction Records for at Least Five Years

All invoices and transaction records must be stored digitally for a minimum of five years. All bookkeeping records must be stored electronically in an approved system, and these documents must be searchable and retrievable for audits.

Now that we have outlined the key requirements of the New Danish Bookkeeping Act, it is essential to consider how these standards impact businesses using older ERP systems.

Implementation Timeline

The act was enacted in 2022, but the digital bookkeeping requirements have been phased in gradually. It is important to understand which deadline applies to your business:

• From 1 July 2024: Companies subject to the Annual Accounts Act (årsregnskabspligtige) using a registered standard bookkeeping system.
• From 1 January 2025: Companies subject to the Annual Accounts Act using a non-registered or custom-built bookkeeping system (such as SAP or Microsoft Dynamics).
• From 1 January 2026: Companies not subject to the Annual Accounts Act, such as sole proprietorships, associations, and branches, provided their net turnover has exceeded 300.000 DKK in two consecutive years.

For businesses using custom or specialised ERP systems that are not registered with Erhvervsstyrelsen, it is the company itself, not the software vendor, that is responsible for ensuring the system meets the requirements of the Bookkeeping Act. This is particularly relevant for SAP and Microsoft Dynamics users.

Challenges of Older ERP Systems Under the New Regulations

ERP is business management software that integrates and automates key functions such as accounting, finance, supply chain, payroll, and reporting into a single system. Companies use ERP systems like SAP and Microsoft Dynamics to improve efficiency, reduce manual processes, and ensure compliance with financial regulations.

Older ERP systems face significant challenges in meeting the requirements of the New Danish Bookkeeping Act. These challenges are primarily due to the lack of built-in features that support digital bookkeeping, e-invoicing, and enhanced IT security.

For businesses operating within complex structures, such as holding companies, managing compliance across multiple entities can be particularly challenging. For more information on holding companies, read our blog What is a holding company?

Limited Digital Bookkeeping Capabilities

Many older ERP versions lack automated compliance features necessary for digital bookkeeping. They may not be able to record transactions electronically or store documents securely, which are essential requirements under the new act. For businesses using systems like SAP and Microsoft Dynamics, this means that additional modules or customisations are needed to ensure compliance with the New Danish Bookkeeping Act.

Lack of Integration with Peppol and NemHandel

Older ERP systems often do not support integration with Peppol, which is necessary for sending structured e-invoices in formats like OIOUBL or Peppol BIS. This integration is crucial for compliance with the act’s e-invoicing requirements. Businesses may need to work with certified Peppol Access Point providers to add this functionality to their existing systems.

Security Risks and Outdated Data Storage Solutions

The New Danish Bookkeeping Act requires robust IT security measures, including secure backups, encryption, and user access management. Older ERP systems may not meet these standards, posing significant cybersecurity risks. Upgrading or implementing additional security modules is essential to protect financial data and comply with the act’s security requirements.

Cost Concerns of Full ERP Replacement

Replacing an entire ERP system can be costly and time-consuming. Many businesses prefer to update their existing systems rather than invest in new ones. This approach is more cost-effective and allows companies to maintain their current infrastructure while still meeting compliance requirements.

Partnering with solution providers like Digisense can help businesses achieve compliance without the need for a full ERP replacement, making it easier to bring SAP and Microsoft Dynamics into line with the New Danish Bookkeeping Act.

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Solutions for Making Older ERP Systems Compliant

To ensure compliance with the New Danish Bookkeeping Act, businesses using older ERP systems like SAP and Microsoft Dynamics need effective solutions. These solutions can either involve upgrading the ERP software or integrating compliance add-ons.

Upgrading ERP Software for Compliance

Upgrading your ERP software is one way to ensure compliance with the New Danish Bookkeeping Act. However, this can be costly and time-consuming.

Here are the steps to consider:

1. Check for upgrades: First, check if your current SAP or Microsoft Dynamics version has an available upgrade that meets the Danish bookkeeping law requirements. SAP, for instance, has decided not to register its products as standard digital bookkeeping systems. This means that businesses using SAP are responsible for ensuring their own system meets the requirements of the act.
2. Work with ERP consultants: Collaborate with ERP consultants or IT providers to install necessary modules that support digital bookkeeping, e-invoicing, and SAF-T reporting. This ensures that your system meets all compliance requirements.

However, upgrading may not be feasible for all businesses due to the associated costs and complexity. For guidance on selecting the best accounting software that meets your business needs and complies with Danish regulations, read our blog How to Choose the Best Accounting Software for Your Business.

Integrating Compliance Add-Ons (Digisense and Other Solutions)

A more cost-effective approach is to integrate compliance add-ons into your existing ERP system. Digisense offers modular solutions that can plug compliance features into older ERP systems, enabling them to meet the requirements of the New Danish Bookkeeping Act. These tools provide automated financial reporting, secure digital storage for invoices and financial records, and Peppol-compliant e-invoicing supporting Peppol BIS 3.0 and OIOUBL formats. By using these add-ons, you can avoid costly upgrades while ensuring full compliance with digital bookkeeping requirements.

For insights into the comprehensive accounting and payroll services offered by Dania Accounting, including those tailored for large enterprises, read our blog What Accounting and Payroll services do we offer large Enterprises?

Peppol Integration for E-Invoicing

What is Peppol, and Why is it Required?

Peppol is a B2B network that facilitates the secure and standardised exchange of digital documents, including e-invoices. In Denmark, Peppol is required for compliant e-invoicing, alongside the NemHandel platform, using formats like Peppol BIS 3.0 or OIOUBL.

How to Integrate Peppol with Legacy ERP Systems

To integrate Peppol with older ERP systems, start by assessing your ERP system’s readiness for Peppol integration. Then select a reliable Peppol Access Point provider to act as an intermediary between your ERP and the Peppol network. Once a provider is in place, map your ERP’s document formats to Peppol’s standardised formats and conduct thorough testing to ensure seamless e-invoice exchange.

Steps to Ensure Invoice Compliance Without Full ERP Replacement

By integrating Peppol into your existing ERP system, you can ensure compliance with e-invoicing regulations without needing a full ERP replacement. This approach is cost-effective and maintains operational continuity while meeting the requirements of the New Danish Bookkeeping Act.

Specific Compliance Features for ERP Systems

To ensure compliance with the New Danish Bookkeeping Act, ERP systems must incorporate several key features.

Peppol E-Invoicing

Ensuring compatibility with Peppol BIS 3.0 and OIOUBL formats is essential for compliant e-invoicing. In Denmark, e-invoices must be sent via the Peppol network or the NemHandel platform using these formats, which are compliant with the European Norm (EN 16931).

SAF-T File Generation

ERP systems must be able to generate SAF-T files that meet OECD standards for digital tax reporting. SAF-T files provide detailed financial data in a standardised format, making it easier for authorities to audit and verify financial records. This feature is crucial for compliance with the Danish Bookkeeping Act and requires ERP systems to be configured to produce these files accurately.

Bank Reconciliation

Automating bank reconciliation processes within older ERP systems is important for maintaining financial accuracy and efficiency. This involves comparing and matching bank statements with transactions recorded in the ERP system to ensure consistency. Microsoft Dynamics 365 Business Central, for example, offers robust features for bank reconciliation, streamlining the process and reducing manual errors.

Digital Archiving

Secure digital archiving of invoices and transaction documents is a mandatory requirement. In Denmark, these documents must be stored electronically for at least five years, although some regulations may require longer retention periods. ERP systems must be capable of storing these documents securely, ensuring they are easily accessible and protected from data loss.

Step-by-Step Guide to Making Your ERP Compliant

Ensuring your ERP system complies with the New Danish Bookkeeping Act requires a structured approach. Here is a step-by-step guide:

Step 1: Assess current ERP system capabilities against Danish Bookkeeping Requirements.

Before making any changes, review your ERP system’s current functions and compare them with the requirements under the new law. The Danish Business Authority mandates several key features for compliance, including digital record-keeping with secure data storage, automated financial reporting in approved formats, Peppol e-invoicing to standardise transactions, and structured tax reporting such as SAF-T compliance.

Check whether your existing ERP system can generate legally required reports, handle digital invoices, and securely store records for the mandatory retention period. If not, upgrades or additional software may be required. This assessment is particularly important for businesses using SAP and Microsoft Dynamics, which are not registered standard systems and therefore carry their own compliance responsibility.

Step 2: Determine whether upgrading or integrating compliance software is the best option.

Businesses using SAP, Microsoft Dynamics, and other non-registered ERP systems must decide between two primary options: upgrading to a newer version or integrating compliance add-ons. This decision depends on factors such as the system’s age, vendor support, and budget.

Upgrading to a newer version of SAP or Microsoft Dynamics can be the simplest option for businesses using outdated software, as newer versions often already include the digital bookkeeping features required for compliance in Denmark. If upgrading is too costly or impractical, third-party solutions like Digisense can add the necessary features, including SAF-T reporting, Peppol e-invoicing, and secure data storage, without requiring a full system replacement. Consulting an ERP specialist or IT provider can help determine the most cost-effective solution for your business.

Step 3: Work with ERP vendors or IT consultants to install compliance modules.

Once a business decides whether to upgrade or integrate compliance software, the next step is working with ERP providers or IT consultants to install and configure the necessary compliance features. This includes installing tax compliance modules to ensure correct VAT reporting and SAF-T compatibility, enabling secure digital storage for financial documents, and configuring automated reporting tools for real-time financial tracking.

Step 4: Ensure Peppol invoicing compatibility and secure data storage.

Peppol e-invoicing is a legal requirement in Denmark. All ERP systems must support Peppol BIS 3.0 and OIOUBL formats for invoice transmission. Some versions of SAP and Microsoft Dynamics already include Peppol features, but businesses using older versions will need to connect through a certified Peppol Access Point provider. All invoices must include structured data for tax reporting, and financial records must be stored digitally in compliance with Denmark’s bookkeeping retention laws. Cloud-based solutions with audit logs and encryption offer a reliable way to meet this requirement.

Step 5: Test and audit ERP compliance.

After implementing compliance upgrades, businesses must test and audit their ERP system to confirm that all bookkeeping requirements are met. This includes running test reports to verify SAF-T file generation, sending sample Peppol invoices to ensure proper formatting, reviewing automated bank reconciliation processes, and checking digital storage for data security and accessibility. Regular internal audits help identify compliance gaps before authorities conduct inspections.

Consequences of Non-Compliance

Failing to comply with the New Danish Bookkeeping Act can have serious consequences for businesses.

Potential Fines

Businesses that fail to comply with the act may face fines ranging from 10.000-25.000 DKK at the lower end up to 1,5 mio. DKK for the most serious violations. The exact amount depends on the company’s size, the severity of the non-compliance, and whether it is a repeated violation (The Danish Business Authority). These fines can be substantial and impact a company’s financial stability.

Qualified Opinion in Annual Reports

Non-compliance can also lead to a qualified opinion in annual reports. This means that auditors express reservations about the accuracy or completeness of financial statements due to inadequate bookkeeping practices. A qualified opinion can damage a company’s credibility with stakeholders, including investors, lenders, and customers. It may also lead to increased scrutiny from regulatory bodies and potential loss of business opportunities.

Costs and Benefits of Upgrading vs. Replacing an ERP System

When considering how to make older ERP systems compliant with the New Danish Bookkeeping Act, businesses must weigh the costs and benefits of upgrading versus replacing their existing systems.

Cost Comparison: Upgrading vs. Replacing an ERP System

Upgrading an ERP system is generally more cost-effective than replacing it. Many ERP providers, including SAP and Microsoft Dynamics, offer updates or add-ons to meet the requirements of the New Danish Bookkeeping Act. Upgrading typically costs between 50.000 DKK and 500.000 DKK, depending on the complexity of the modifications and licensing fees. Replacing an ERP system can be significantly more expensive, often exceeding 1 mio. DKK, including software licensing, implementation, and training costs. While upgrading is often the more affordable choice, it is crucial to assess whether the existing system can handle future compliance needs and business growth.

Time and Resource Investment for ERP Compliance

Both upgrading and replacing an ERP system require time and resources. Upgrading typically takes 3 to 6 months, depending on the number of changes required and the availability of compliance modules. Replacing a system may take 12 to 24 months, as it involves selecting new software, migrating data, training staff, and ensuring integration with existing business processes. For businesses that need to establish compliance quickly, upgrading is usually the faster solution. However, if the existing ERP system is outdated and difficult to maintain, investing in a new system may be the better long-term option.

Long-Term Benefits: Automation, Security, and Reduced Audit Risks

Regardless of the approach, ensuring ERP compliance brings several long-term benefits. Digital bookkeeping systems rely on automated reporting, reducing manual data entry and errors. Upgraded ERP systems include stronger data encryption and secure storage, preventing financial data breaches. A compliant ERP system also ensures accurate financial reporting, making audits smoother and reducing the risk of penalties.

Conclusion

Businesses using older ERP systems must ensure they meet the requirements of the New Danish Bookkeeping Act. The act mandates the use of digital bookkeeping systems that support e-invoicing, SAF-T reporting, and secure data storage. For companies using non-registered systems such as SAP and Microsoft Dynamics, compliance responsibility rests with the company itself, not the software vendor.

The digital bookkeeping requirements are now in force for all companies covered by the act. The final phase, covering sole proprietorships and associations with turnover above 300.000 DKK in two consecutive years, came into effect on 1 January 2026.

Upgrading or integrating compliance tools into your existing ERP system is often more cost-effective than replacing it entirely. Solutions like Digisense offer modular compliance modules that can be integrated into older systems, enabling them to meet the requirements of the act without the high costs and operational disruptions associated with full ERP replacement.

(This blog was last updated: 10.06.2026)

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