How to prepare written Accounting Procedures in Denmark in 2025

How to prepare written Accounting Procedures in Denmark in 2025

In this blog, we discuss how to prepare written Accounting Procedures in Denmark in 2025.

Companies in Denmark of a certain size must have written Accounting Procedures in place.

The document describing Accounting Procedures is an internal document and should not be submitted anywhere unless requested by the authorities or during an audit.

Nevertheless, you should have the written Accounting Procedures done and update them regularly to avoid non-compliance and possible fines or remarks during an audit.

The Danish Business Authority have released a template document which can be used, but you can make your own document also if you prefer to do so.

In a Hurry?

1: Most companies in Denmark are required to have written Accounting Procedures in place;
2: The Accounting Procedures must ensure that all transactions are recorded on an ongoing basis and kept securely;
3: You can expect to get a fine, audit remarks or a quarantine period as a director if you do not comply with the rules.

Documenting your written Accounting Procedures is a legal requirement

All Danish companies with revenue exceeding 300.000 DKK per year for two consecutive years must prepare a written description documenting their Accounting Procedures containing the following:

1: Accounting Procedures that ensures that all transactions of the company are recorded on an ongoing basis;
2: Accounting Procedures that ensures the company’s accounting records are kept securely.

and

A description of which personnel is responsible for the Accounting Procedures.

Does your company have written accounting procedures in place?

Danish regulations require most Danish companies to create and maintain written procedures for all significant accounting processes and ensure that these procedures are kept up to date.

The regulations were designed to enhance transparency and accountability in financial reporting, while also providing clarity and consistency in accounting practices. Companies that fail to comply with these rules could face fines and penalties from the Danish Financial Supervisory Authority (DFSA).

Here are some key aspects of the new rules for written accounting procedures:

Definition of “Significant Accounting Processes”

Under the Danish Bookkeeping Act that took effect in 2023, all companies must identify all significant accounting processes and create written procedures for each one. But you may ask, what exactly are considered “significant” processes?

The rules define significant accounting processes as any process that have a material impact on the company’s financial statements or that involve complex accounting principles. Simply put, a process is significant if getting it wrong could materially misstate your company’s financial position or results.

Examples of processes that are typically considered significant include:

• Revenue recognition: how the company records revenue from sales of products and services, including timing of recognition, discounts and returns, multi-element arrangements, etc.;
• Accounts Receivable and Payable: the process around invoicing, cash receipts and disbursements, credit memos, payables cutoff, etc.;
• Inventory Accounting: tracking inventory levels, costing methods, obsolescence reserves, inventory takes and adjustments;
• Payroll: all steps regarding paying employees, withholding taxes, accruing paid time off, and other payroll liabilities;
• Fixed Asset Accounting: capitalisation policies, depreciation methods, disposals and transfers relating to property, plant and machinery.

Content of Written Accounting Procedures

The written procedures must include a description of the process – a step-by-step explanation of each significant accounting process from initiation to completion. Examples may include transactions like invoicing, payment processing, payroll management, and financial reporting.

Written accounting procedures also specify the individuals or departments responsible for carrying out each step of the accounting process to ensure accountability and clarity regarding who is accountable for which tasks.

Moreover, written accounting procedures detail the internal controls and checks in place to ensure the accuracy, completeness, and integrity of financial data. This may include segregation of duties, authorisation requirements, and reconciliation procedures.

The procedures should also detail any relevant accounting standards or regulations that apply to the process.

What should the written Accounting Procedures contain?

The Accounting Procedures should contain:

1: General information

When was the Accounting Procedures prepared and updated last time.

2: CVR number of the company

Write the CVR number of your company.

3: An overview of responsible employees in your company

It is not necessary to describe who does the accounting.

But you need to describe who is responsible for the accounting in your company.

4: What tasks are handled by an external accounting firm

If you have an agreement with an external accounting firm like Dania Accounting, you should describe what tasks the accounting firm handles.

Sometimes all the accounting is handled by the accounting firm.

But you could also be doing some of the tasks yourself.

So make sure to describe who does what.

5: CVR number of the external accounting firm

Write the CVR number of your accountant if using an external firm.

6: Accounting software

Write the name of the accounting software you are using.

How to choose the best accounting software for your business in Denmark in 2025

7: Chart of Accounts

Describe what Chart of Accounts you are using.

If you are using standard accounting software (f.ex. e-conomic, Dinero or Billy), most likely, you are using their standard Chart of Accounts.

It is also possible that you are using a custom Chart of Accounts.

We recommend to attach the Chart of Accounts to the Accounting Procedures.

8: Description of significant transactions

Make a description of significant transactions in your accounting.

9: Procedure for registering transactions

Describe your procedures for registering transactions.

10: Reconciliation of the accounting

Describe what reconciliation procedures you have.

11: Storage of the accounting data and documentation

Describe how the accounting data and documentation is stored.

12: Security measures relating to accessing stored accounting data and documentation

Describe what security meassure you have for accessing stored accounting data and documentation.

13: How to access your accounting data and documentation

Describe how to access your accounting data and documentation.

Download a template for your written Accounting Procedures here

You can download a free template for your written Accounting Procedures here.

Are you already a client with Dania Accounting?

If yes, your accountant normally keeps an updated version of your Accounting Procedures on file on your behalf.

What happens if you do not have a written Accounting Procedures prepared?

We expect fines for the companies that fail to comply with these rules.

If your company is audited, it is possible that your auditor will make a remark in the audit protocol, that the management have not made the written Accounting Procedures.

Also, non-compliance could likely result in a quarantine to work as a director in a limited liability company (f.ex. ApS) for one or more years, if your company goes bankrupt for whatever reason at some point.

Review and Update Requirements

Written accounting procedures must be reviewed and updated on a regular basis to ensure that they remain current, accurate, complete and aligned with current business practices and regulatory requirements.

The frequency of these reviews will depend on the complexity and importance of the process in question; more complex processes may require updates annually or even more frequently, while simpler processes could be every two to three years.

Moreover, written accounting procedures should be flexible and adaptable to changes in internal and external factors that may impact the organisation’s financial operations. These factors may include changes in business practices, technological advancements, regulatory updates, or shifts in market conditions.

Record-keeping Requirements

Companies must keep records of all written accounting procedures – the initial creation of procedures for each significant accounting process, as well as any subsequent modifications, updates, or revisions made over time.

These records must be kept for a minimum of five years. This timeframe is established to align with regulatory requirements and allows for the preservation of relevant documentation for audit, review, or inspection purposes.
Also, companies must make available the records of the written accounting procedures for inspection by the Danish Financial Supervisory Authority (DFSA) upon request.

Lastly, records of written accounting procedures must be comprehensive and include detailed information regarding the content, implementation, and updates of each procedure. This may encompass documentation of process descriptions, responsible personnel, controls, relevant accounting standards or regulations, review dates, and any other pertinent details.

Training and Education

Companies should provide training and education to employees involved in significant accounting processes to ensure that they understand and can follow the written procedures. Training initiatives should emphasise the importance of adherence to written accounting procedures and provide guidance on how these employees can implement these procedures in their day-to-day activities.

Training programs should address potential risks, errors, and non-compliance issues associated with significant accounting procedures and provide strategies for mitigating these risks.

Lastly, new hires should be trained on relevant written accounting procedures as part of their onboarding process to ensure a smooth transition into their roles and alignment with company policies and practices from the outset.

Fines and Penalties

Under the Danish Bookkeeping Act, companies failing to adhere to the requirements for written accounting procedures may face fines.

These fines can be substantial and may increase depending on the severity and duration of the non-compliance.

The amount of the fine is determined by the DFSA and can vary based on factors such as revenue and the impact of the violation on financial reporting accuracy.

Administrative Sanctions

In addition to fines, the DFSA may impose administrative sanctions on non-compliant companies.

Liability

In cases of non-compliance with accounting regulations, individuals responsible for financial oversight within the company may face liability under Danish law. This could result in fines, imprisonment, or both, depending on the severity of the offence and the level of culpability.

Summary

As of 2025, rules are implemented in Denmark regarding the requirement for written accounting procedures. These rules are aimed at improving transparency and accountability in business practices, as well as ensuring compliance with Danish accounting standards.

Under the rules, all Danish companies are required to maintain written accounting procedures that clearly document how financial transactions are processed and recorded. This includes everything from invoicing and payment processing to payroll and tax reporting.

These written procedures must be up-to-date and reviewed regularly to ensure they remain accurate and effective. In addition, they must be made available to auditors and other stakeholders upon request.

Companies that fail to comply with these new rules may face fines or other penalties, and may also be subject to increased scrutiny during audits.

The Danish government has emphasised that these new rules are not meant to be overly burdensome for businesses, but rather to ensure that accounting practices are transparent and in line with Danish law. By having written accounting procedures in place, companies can more easily identify and address potential issues, and ensure that their financial reporting is accurate and reliable.

To help companies navigate these new rules, the Danish Business Authority has published guidelines and templates for creating written accounting procedures. These resources provide a framework for companies to document their accounting processes and ensure compliance with the new requirements.

Overall, the new rules for written accounting procedures are an important step forward for transparency and accountability in Danish business practices. By requiring companies to document their accounting procedures, Denmark is ensuring that financial reporting is accurate and reliable, and that businesses are held to high standards of integrity and transparency.

Need help with your written Accounting Procedures?

If your company has yet to develop its written accounting procedures, you are running the risk of non-compliance and potential penalties. Take action now to ensure your business meets the requirements of the Danish Bookkeeping Act.

Start by downloading the free template provided above, made to streamline the development of your written accounting procedures.

Our company specialises in helping Danish businesses achieve compliance with the new accounting procedure rules. Our team of experts can provide guidance and assistance throughout the process to ensure a smooth transition towards compliance.

Contact us today for personalised assistance tailored to your company’s specific needs.

Let us help you protect your business from potential fines by implementing written accounting procedures that meet the highest standards of the Danish Bookkeeping Act.

This blog was updated: 27.10.2025