Can the owner of an LLC manage accounting by themselves?

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Small business owners in Latvia often ask if hiring an accountant is mandatory. According to the Central Statistical Bureau (2024), over 20% of micro-companies manage accounting on their own. The State Revenue Service (VID) confirms: the law allows the owner of an LLC to handle accounting, but full responsibility lies with the company director.

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Main requirements and step-by-step guide

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Steps:

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1. Register the LLC with the Enterprise Register.
2. Choose a tax regime: general system or micro-enterprise tax.
3. Study the Law on Accounting (Likums "Par grāmatvedību", 2021).
4. Keep track of income, expenses, salaries, and taxes.
5. Submit reports to VID via the Electronic Declaration System (EDS).
6. Store invoices and receipts for 5–10 years.

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Details and examples

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• Article 6 of the Law on Accounting states that the company manager is responsible for correct records.
• Companies with annual turnover under €40,000 may use simplified accounting.
• VAT-registered companies face stricter reporting requirements.
• Official source: https://vid.gov.lv.

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Advantages and risks

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Advantages:

• Save €120–300 per month on accountant services.
• Full financial control.
• Use online accounting tools (e-grāmatvedība, Finanšu sistēmas).

Risks:

• Errors in tax reports lead to fines (€70–700).
• Up to 20 hours per month required for accounting.
• Possible tax inspections.

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FAQ

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1. Can an LLC owner do accounting without an accountant?
   Yes, the law allows it.
2. How are reports submitted?
   Through EDS only.
3. When should an accountant be hired?
   With higher turnover or VAT registration.
4. What are the penalties for mistakes?
   €70–700, depending on the violation.
5. Is Excel enough for accounting?
   Yes, but professional software is safer.
6. Who is responsible for errors?
   The LLC owner.

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Managing accounting on your own is legal but risky. To save time and avoid fines, consider outsourcing.

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