If you own a company in Germany and are based abroad yourself, you ask the same three questions every month: Is the subsidiary making money? Is there enough liquidity? Who owes whom what? Our aim is for you to answer these questions in 15 minutes. That does not take a new system, but a fixed routine: clean bookkeeping in Germany, a fixed reporting pack, a bridge to your group chart of accounts and clear access rights.
Two views of the same numbers
The German GmbH is a legal entity in its own right. It keeps its own books under German commercial law (§ 238 HGB), even if it is 100% owned by your parent company. Responsibility for this lies with the management, even if the managing director lives abroad.
“The managing directors are obliged to ensure that the company keeps proper books.” (our translation)
§ 41 GmbHG
The GmbH prepares its annual financial statements in German and in euros (§ 244 HGB). They later become public: corporations must submit them for disclosure no later than one year after the balance sheet date (§ 325 HGB). This statutory view is meant for authorities and creditors, not for managing your business. Your group headquarters needs a second view: monthly, in its own structure, in its own language. Both views must come from the same bookings. Otherwise you end up debating two versions of the truth at year-end.
The reporting pack: four pages, the same every month
In Germany, the monthly report from the bookkeeping is called the BWA, short for “betriebswirtschaftliche Auswertung” (management accounts). The standard comes from the German software company DATEV. According to DATEV, the standard BWA (Form 01) includes a short-term income statement, a funds flow statement, a static liquidity view and prior-year and budget-versus-actual comparisons, among other things. From this, we build a pack that an investor without any prior knowledge of Germany can read:
| Page | Content | Question it answers |
|---|---|---|
| 1. Results | Revenue, gross profit, costs, result – month and year to date, against plan and prior year | Are we making money? |
| 2. Liquidity | Bank balances, payments due, outlook for the coming weeks | Is there enough cash? |
| 3. Open items | Receivables and payables by age, split between third parties and group companies | Who owes whom what? |
| 4. Commentary | Three to five sentences on variances and upcoming decisions | What do we need to do? |
The fourth page is the most important. Numbers without explanation trigger follow-up questions, and follow-up questions across time zones cost days. How to build a BWA for decision-making rather than for filing is described in our article on the Real-Time BWA. Here, the focus is the view from outside: what reaches the parent company, in what form and by what route?
The same structure every month, a fixed delivery date, figures in your group's structure, commentary in your language and one fixed contact for questions. If any of these five conditions is missing, reading takes longer.
The data flow: from receipt to group report
- Receipts and bank data are transferred digitally into DATEV Unternehmen online, the cloud platform for exchange between companies and their tax firm. According to DATEV, login is via SmartCard, mIDentity stick or SmartLogin.
- The bookkeeping is prepared by our partner tax firm TABAK Steuerberatung in DATEV accounting. Tasks reserved by law for tax advisors remain there.
- The month-end close covers accruals, reconciliation of intercompany balances and the BWA.
- The mapping translates every German account number into a line item of your group chart of accounts.
- The hand-over to the parent company's ERP takes place as an agreed file or via an interface. DATEV offers certified programming interfaces (APIs) for this.
To start with, a file export with a fixed structure is often enough. An automated interface pays off once the mapping is stable. This is how we implement structure, bookkeeping and IT as one concept rather than three separate engagements.
Chart of accounts mapping: from SKR to the group chart of accounts
German bookkeeping usually runs on a standard DATEV chart of accounts. The most widely used are SKR 03 and SKR 04. SKR 03 organises accounts by business process, SKR 04 by the structure of the balance sheet and income statement. Your group, by contrast, has its own chart of accounts, often based on home-country rules. The bridge is a mapping table: every German account points to exactly one group line item.
“Most reporting problems are really mapping problems. If one German account is supposed to feed two group line items, the totals won't match at month-end. We define the mapping once, version it and check every change before it takes effect.”
Metehan Kurt, IT consultant · DAVINCI Rechenzentrum
The mapping also solves the language question. The German account names stay in German. Your headquarters, however, sees its own line items, in its own language. For the books, the law only requires a “living language” (§ 239 HGB). If a language other than German is used, the tax office can request translations (§ 146 Abs. 3 AO).
Access from abroad: reading yes, moving the books only with approval
This is the most important German peculiarity. Books and records must, as a rule, be kept and stored in Germany (§ 146 Abs. 2 AO). Electronic books may be held in another EU member state without an application, provided the tax office retains full data access (§ 146 Abs. 2a AO). For a country outside the EU, approval is required.
“By way of derogation from paragraph 2 sentence 1, the competent tax authority may, upon written or electronic application by the taxpayer, approve that electronic books and other required electronic records, or parts thereof, may be kept and stored in one or more third countries.” (our translation)
§ 146 Abs. 2b Satz 1 Abgabenordnung (German Fiscal Code)
Among other things, the location of the system must be disclosed and the tax auditors must have full data access. Anyone who moves the bookkeeping to a third country without approval risks a delay penalty of €2,500 to €250,000 (§ 146 Abs. 2c AO). Retention periods are up to ten years (§ 147 Abs. 3 AO).
In practice, this means: if your headquarters reads reports and dashboards, it is not keeping the books. If, on the other hand, the German GmbH posts directly in the parent company's ERP and that system runs outside the EU, that is a question for § 146 Abs. 2b AO. We clarify exactly where the line runs with our partner tax firm in advance, and file an application if in doubt.
For access rights, one simple principle applies: every person has their own login, and the parent company reads rather than posts. There are no shared accounts or passed-on passwords.
Data protection: group figures contain people too
Payroll, travel expenses and customer accounts contain personal data. The EU General Data Protection Regulation (GDPR, DSGVO in German) recognises that groups may have a legitimate interest in transferring data for internal administrative purposes (Recital 48). At the same time, it makes clear that the rules on transfers to third countries remain unaffected. Our rule of thumb: group reporting gets totals, not names. How transfers to China work legally and technically is explained in our article Data between China and Germany.
A typical case
Suppose a Chinese industrial investor has acquired a German automotive supplier. Parts of production now run abroad, while sales remain in Germany under the established brand. The German GmbH therefore buys from group companies and sells to customers in the EU. For headquarters, three numbers matter most: the German company's margin, the level of intercompany payables and liquidity. These are exactly the three at the top of the reporting pack. Why the margin of such a sales company also matters for tax is shown in our articles Produce Abroad, Sell in Germany and Transfer pricing documentation.
We advise you in English — directly, without intermediaries.
Frequently Asked Questions
Can our group accounting team abroad keep the books of the German GmbH?
In another EU member state, yes, provided the tax office retains full data access (§ 146 Abs. 2a AO). Outside the EU, only with the tax office's approval (§ 146 Abs. 2b AO). Without approval, a delay penalty may be imposed.
Do we get the figures in our language?
Yes, through the mapping to your group chart of accounts and the commentary. The statutory annual financial statements, however, remain in German and in euros (§ 244 HGB).
Who is liable if the bookkeeping is wrong?
The obligation lies with the managing directors of the GmbH (§ 41 GmbHG), even if they live abroad. That is why the managing director should see the reporting pack as regularly as headquarters does.
Do we need an interface to the parent company's ERP straight away?
No. A file export with a fixed mapping is enough to start with. An automated interface follows once structure and mapping are stable.
May headquarters see the payroll data of individual employees?
That is a data protection question and requires a legal basis. For management purposes, totals per department are usually sufficient. That way, personal data stays where it belongs.
Sources
- § 146 AO – bookkeeping rules (Abs. 2, 2a, 2b, 2c, 3)
- § 147 AO – retention of records, data access
- § 41 GmbHG – bookkeeping
- § 239 HGB – keeping the commercial books
- § 244 HGB – language, currency
- § 325 HGB – disclosure
- DATEV: BWA Form 01 – DATEV standard BWA (Doc. No. 9211724)
- DATEV: SKR 03 and SKR 04 charts of accounts
- DATEV Unternehmen online
- Regulation (EU) 2016/679 (GDPR), Recital 48
Your subsidiary at a glance.
We set up the bookkeeping flow, mapping and access rights so that your headquarters knows every month, in 15 minutes, where the German company stands. The bookkeeping is prepared by our partner tax firm TABAK Steuerberatung.