Recovery of primary documentation

Recovery of primary documentation

Author

Vorozhbitova Krystyna

Restoration of primary documentation

The accounting report that is kept at the enterprise, every day comes across such a concept as primary documentation. This is the most important element in the conduct of business, the correct provision of which directly affects the financial result of the enterprise. Such a financial result very often suffers from financial sanctions and deductions from the tax authorities. Therefore, let’s take a closer look at this topic.

What is a primary document?

Primary documents form the basis of every accounting report. Each transaction of sale, supply, provision of services, performance of work or other activities is accompanied by the signing of the primary documentation by the parties. Thus, a primary document is understood to mean a document that is drawn up in written or electronic form, which carries information about a business transaction between counterparties.

This issue is regulated at the level of legislation, for example, by the norms of the Tax Code of Ukraine, the Law on Financial Accounting and Puffiness of July 16, 1999, by the order of the Ministry of Finance of May 24, 1995 on documentary provision of entries in the accounting report.

The aforementioned legislative acts do not have a list of primary documents. In practice, these are cash orders, an act of work performed, a consignment note, an act of provided services, an invoice, a fiscal receipt, and many others. The main thing for the primary document is the presence of mandatory signs. This is very important, since such documents are drawn up to record the fact of a business transaction. This is what has legal significance and consequences. In a greater number of cases, it is the presence of primary documents that serves as the basis for classifying the amounts paid as expenses based on the results of the financial reporting period. This applies to business entities that operate on a common taxation system.

Regarding the general rules, it is worth recalling that all primary documents of business entities are required to keep them for at least three years, and documents on transactions that are subject to financial monitoring – for at least five years. Responsibility for the maintenance and storage of financial statements is borne by an authorized person or body (for example, the chief accountant), the head of the company or the owner.

What to do in case of loss of primary documents?

That is why a very important question that each business has, in most cases before a tax audit, is the question of auditing primary documents, as well as restoring lost ones and working on previously not compiled primary documents. Therefore, it is worth considering separately two separate cases:

• loss or destruction of primary documents;
• preparation of previously unwritten documents..

The first case can occur due to force majeure, not responsible attitude of the responsible employees, or for other reasons. But at the same time, such situations do not affect the following actions of the enterprise to work on the restoration of primary documentation.

And so, the restoration of primary documentation must meet the requirements of the law and looks like this:

The head of the enterprise is obliged to notify the law enforcement agencies (police, tax police) of the fact in writing.

An order is adopted to appoint a commission to draw up a list of missing documents, which includes employees of the investigative authorities, security and fire supervision.

Finding out the reasons for the loss or destruction of documents.

Drawing up an act of the results of the commission’s work, which is signed by the head.

Sending the act to the controlling state authorities (tax, social insurance) within ten days.

After sending the act, you have ninety days to restore the lost primary documents. You can do this in different ways:

• issue duplicate agreements with your partners;
• to issue duplicates of primary documents;
• apply to state authorities for the re-issuance of the necessary documents;
• obtain copies of reports from authorized entities.

In most cases, recovery should be done through negotiation with the other party.

As for the second case – drawing up previously unwritten documents, everything is much simpler here. You do not need to send any acts or notifications to the tax or other authorities. Here your employees should accumulate maximum efforts regarding the preparation of the necessary documents and their further signing with counterparties.

Consequences of the absence of primary documents

There is no unified practice regarding the consequences of the loss of primary documentation, since each case is unique, and only specialized specialists in this area can predict the behavior of controllers.

Remember the following about this:

• lack of primary documents – the way to additional tax liabilities;
• lack of primary documents has consequences in the form of penalties;
• lack of primary documents entails business reputation of your business.

By contacting Prikhodko & Partners Law Firm, we will be able to provide:

• complete and accurate accounting;
• defective and sufficient level of tax burden;
• control over the safety of material assets;
• strengthening the rule of law in your enterprise.

How we work:

Restoration of primary documentation is very important and necessary.

In practice, Prikhodko & Partners Law Firm has faced such problems for its clients many times and each time helped to avoid large financial sanctions and business losses. A more professional approach in this matter is not just necessary, but obligatory, since there is no time to slow down. Contacting our specialists today will help you anticipate and avoid financial sanctions tomorrow, so immediately sign up for a consultation with our specialists.