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Bookkeeping

Verifications, VAT and annual accounts: how to keep track of the money, with the differences between UF companies, sole traders, trading partnerships and limited companies.

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What you get from this

After this guide, you have bookkeeping that holds up for your company form. You document every sale and every cost on the same day, you know how VAT should be handled in your specific case, and you have clean records when the year is to be closed and the tax return is filed. All with concrete examples and figures.

How much is required differs between the company forms. A UF company gets by with a spreadsheet; a sole trader (enskild firma), a trading partnership (handelsbolag) and a limited company (aktiebolag) follow the Swedish Bookkeeping Act (bokföringslagen). Where the advice differs, there is a tab for each form.

The bookkeeping advice follows how we read the rules. If you are unsure how your company should keep its books and file its returns, ask the Swedish Tax Agency (Skatteverket) or an accounting consultant before you choose a setup.

What applies to your type of company

For UF companies

You need to be able to show every income and every cost, for the UF company, for the teacher and for each part-owner's tax return. A shared spreadsheet with one row per event is enough. Two things set you apart from other companies: a UF company cannot be registered for VAT and does not add VAT to its prices, and the UF year runs from autumn to spring while the tax year is a calendar year. Your year is therefore split across two calendar years in the bookkeeping.

For sole trader

You are required to keep accounts from the first day, and the bookkeeping must follow the Swedish Bookkeeping Act (bokföringslagen): double-entry bookkeeping on accounts, in practice according to the BAS chart of accounts, with a voucher for every business transaction. The financial year is the calendar year. If net turnover is normally no more than 3 million SEK, you may prepare a simplified annual accounts. VAT is governed by whether the business is VAT registered or VAT exempt, and that determines how each purchase is recorded.

For trading partnerships and limited partnerships

It is the company that is required to keep accounts, not each of you separately. If at least one partner is a private individual, the financial year must be the calendar year. If the company has only private individuals as partners and a net turnover that is normally no more than 3 million SEK, it may prepare a simplified annual closing of accounts. If the company is registered for VAT, the VAT is booked to separate accounts.

For limited companies

A limited company uses double-entry bookkeeping and prepares an annual report every year that is sent to the Swedish Companies Registration Office (Bolagsverket). The financial year is the calendar year or a broken financial year that you have chosen. VAT is booked to its own accounts. Here a proper accounting program pays off from day one; a spreadsheet does not go far.

What you need before you start

  • An accounting program, for example Bokio (no longer with a free tier, but with a trial period). A UF company can instead use a shared spreadsheet with the columns date, description, income, cost and balance.
  • A folder, physical or digital, where every receipt and invoice is saved.
  • An account and a Swish number where the company's money is kept separate from private money.
  • If there are several of you: two people who share the responsibility, so that no one does the bookkeeping alone.

Time required and difficulty level

The setup itself takes about an hour. After that, 15 to 30 minutes a week is enough to keep the bookkeeping going, plus a few hours when the year is to be closed. The difficulty level is low to medium, and no prior knowledge is required.

How to do it

  1. Set up your bookkeeping. Every business transaction, meaning everything that affects the money, is recorded with supporting documentation: a receipt, an invoice or a confirmation. The documentation is called a voucher and is numbered in the order it is created.
  2. Record every sale on the same day it happens. Example: on March 12 you sell ten bags for 2,500 kronor via Swish. Without VAT, the line is income of 2,500 kronor. If you are registered for VAT, 2,000 kronor is sales and 500 kronor is output VAT, which you pay to the Swedish Tax Agency (Skatteverket). Save the Swish confirmation as a voucher.
  3. Record every purchase right away and photograph the receipt directly in the store. How the VAT on the purchase is recorded is covered in the section on VAT below.
  4. Reconcile against Swish and the bank account once a week. Go through every incoming and outgoing payment and check that it is in the bookkeeping with the correct amount. If you are several people, the person doing the reconciliation should not be the one who made the most purchases; two pairs of eyes catch more errors.

VAT on purchases and sales

Example: you buy fabric for 1,250 kronor including VAT. If the company is registered for VAT, 1,000 kronor is the cost and 250 kronor is input VAT, which you deduct in the VAT return. If the company is exempt from VAT, the full 1,250 kronor is the cost and you do not add VAT to your prices.

A company based in Sweden that sells for no more than 120,000 kronor per calendar year, and has not exceeded the limit in either of the two previous years, is automatically exempt from VAT. The exemption requires no application, and the company then does not need to register for VAT. If sales exceed 120,000 kronor during the year, VAT must be charged from the sale that passed the limit, and the company must then register for VAT with the Swedish Tax Agency (Skatteverket). An exempt company cannot deduct VAT on its purchases; if you want the deduction, you can apply for VAT registration anyway.

A worked example makes the difference clear. Suppose you sell candlesticks. During the autumn you sell for 18,000 kronor and buy material for 10,000 kronor, packaging for 1,200 kronor and labels for 800 kronor, all including 25 percent VAT.

  • Without VAT: 18,000 minus 10,000 minus 1,200 minus 800 gives a profit of 6,000 kronor.
  • Registered for VAT: the income becomes 14,400 kronor and the costs 9,600 kronor, so the profit becomes 4,800 kronor. The difference, 3,600 kronor in output VAT minus 2,400 kronor in input VAT, you pay to the Swedish Tax Agency (Skatteverket): 1,200 kronor.

The same sales, two different profits. That is why the price must be set with VAT in mind from the start.

For UF companies

A UF company cannot be registered for VAT. The full amount on every receipt is your cost, and you do not add VAT to your prices. That also means that neither you nor your customers can deduct any VAT on what you sell.

Close the year and file your tax return

For UF companies

Add up income and costs separately for each calendar year, since your UF year spans two. Then divide the result per part-owner according to your part-owner agreement, or equally if you have not agreed otherwise, and print a summary per person and calendar year.

Each part-owner declares their own share; the UF company does not file its own tax return. But a part-owner only needs to declare and pay tax on their share of the profit if it, together with any salary, reaches the threshold for paying tax, 25,042 kronor for 2026 according to the Swedish Tax Agency (Skatteverket). If all income during the year is below the threshold, you declare in May the following year. How the share should be reported depends on whether you sold goods or services and to whom. Follow the Swedish Tax Agency's information about UF companies and ask your UF advisor before you fill in anything. Save all documentation in a labeled folder, and give a copy to your teacher.

For sole trader

Close the year on December 31 and do the annual accounts: reconcile the accounts, count the inventory if you have one, and enter what belongs to the year but has not been paid yet. The result is carried over to attachment NE in your own income tax return. There you can also set aside funds in a periodization fund, at most 30 percent of the income, and the allocation must be reversed by the sixth year at the latest.

The self-employment contributions are calculated on the surplus. What you take out of the business for yourself is not salary and not an expense; you are taxed on the surplus, regardless of how much you have taken out.

For trading partnerships and limited partnerships

Close the financial year and prepare the annual accounts. Then calculate each partner's share of the profit according to the partnership agreement. The company files its own income tax return, INK4, but does not pay any income tax itself.

Each partner is taxed on their share, regardless of whether the money has been withdrawn or remains in the company. A partner who is a private individual reports their share on the N3A attachment; a partner that is a company uses N3B.

For limited companies

Close the financial year and prepare the annual accounts with an annual report. The board signs it, the annual general meeting must be held within six months of the end of the financial year and adopts it, and after that it is sent to the Swedish Companies Registration Office (Bolagsverket). If it has not arrived within seven months of the end of the financial year, there is a late filing fee.

The company files income tax return 2, INK2, and pays corporate tax on the profit, currently 20.6 percent. The owners are taxed on what they receive as salary or dividends. In a close company, the owner who has received dividends files the K10 attachment; the Swedish Tax Agency (Skatteverket) recommends filing it every year even without dividends.

For a sole trader (enskild firma), trading partnership (handelsbolag) and limited company (aktiebolag), the bookkeeping must be saved for seven years, counted from the end of the calendar year in which the financial year ended. A UF company must also save the bookkeeping, receipts and invoices for seven years, with one of you, so that you can show what happened if the Swedish Tax Agency (Skatteverket) asks. It must be kept at the company, where it can be found even if the person who kept it leaves, and a copy should be stored outside your own computer.

How you know it worked

Every krona that passed through Swish or the account has a line in the bookkeeping and a voucher in the folder. The balance in the bookkeeping matches the bank statement exactly. If you are registered for VAT, the VAT in the bookkeeping matches what you report to the Swedish Tax Agency (Skatteverket). And you can show in five minutes how much you sold, what you spent and what was left over.

If something goes wrong

  • A receipt is missing: ask the store for a copy. Otherwise a bank statement together with your own note about what the purchase was and who made it is enough.
  • A sale is missing from the bookkeeping: go through the Swish history week by week and reconcile. It is almost always a forgotten market day or a private Swish payment that got mixed in.
  • Private money and company money have been mixed: go through the period, mark every private expense and settle it, and then let the company use only its own account and its own Swish number.
  • A supplier invoice includes VAT: if you are VAT registered, you split the amount into cost and input VAT. If you are VAT exempt or a UF company, the whole invoice is a cost.
  • The spreadsheet stops calculating or someone overwrites formulas: keep version history, lock completed months and save a copy outside your own computer.
  • A purchase was forgotten last month: enter it with the correct date, mark the row as an addition and write down why it came in late. Honesty in the bookkeeping is always better than hoping no one notices.

What you do next

With the bookkeeping in order, the next step is an address your customers recognize, and the guide Domain and email shows you how. Go through Legal checklist so that agreements and terms hold up. If you run a UF company, Closing in June is the guide for the end of the year.

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