The rules for the processing of primary documents

The term “primary documents” serves as a designation to confirm the transactions of taxpayers, and it is well known to specialists in various fields. Primary documents can be accounting documents and tax documents, confirming expenses, deductions, exemptions, etc. The primary purpose is to confirm events and business transactions relating to the sale of goods, purchase of materials, provision of customer services and payment of wages and salaries.

Here, it would be appropriate to consider a narrower concept called “primary accounting document”, which is given in Article 9 of the Federal Law, No. 402 “On Accounting”. The completion takes place during or at the end of any business transaction. Particular attention must be paid to completing this document, as it is usually prepared by suppliers.

It is based on legal requirements. This is necessary in order to correctly reflect expenditure, confirm it and calculate the tax base correctly. The basis for compliance with the standard is Act no. 402. Since 2013, forms are allowed to be developed independently. They must be reflected in the firm’s policy.

Specifics of work and accounting documentation

Article 9, paragraph 2 of the Federal Law 402 implies a procedure for completing primary accounting documents with details without which they will be considered legally invalid:

• name and type;
• date of creation;
• title of the legal entity (LLC, JSC) or entrepreneur 
• content of the form;
• figures in kind and financial equivalents
• the details of the person responsible for the process;
• signatures of each party.

Such data serve as the basis for the recording of information in registers and the processing of primary documents in accounting according to Article 9 par. 3 of the Federal Law No. 402. It is possible to use forms according to standards as well as special forms developed by companies.

The rules for the processing of primary documents do not only imply physical formats. Electronic signatures (ES) of two parties are permitted. Unilateral certification is not permitted, otherwise the document has no legal effect.

Retention rules

The standard retention period for accounting information cannot be less than 5 years. Nowadays, it is much more convenient to store it electronically, certify it with a signature and perform primary analysis of accounting documents. This makes it easier to keep track of information and search by pre-set parameters.

If the form is stored improperly or is missing, it cannot be used or VAT deducted. The company runs the risk of being fined 10,000-30,000 roubles or even more, up to administrative liability for the head and staff of the company. There may be additional tax assessments from the Federal Tax Service and additional payments of at least 2,000 roubles for each item.

In the event of loss, a special internal commission is set up to investigate the reasons for the loss. If recovery is required, representatives of government agencies are involved, a report is drawn up and letters and enquiries are sent. In the case of an irretrievable loss, recovery is allowed. Requests are sent in writing to counterparties, service organisations, banks, the tax authorities, the Inspection Office of the Federal Tax Service, the Pension Fund of the Russian Federation and the Social Insurance Fund.

Division according to the stages of the business

It should be noted that there are differences in composition according to the stages of the business. It all depends on the type of transaction. Thus, here we can distinguish transactions which take place in 3 stages. Let us consider each of them in more detail.

The first stage involves the drawing up of an agreement. This results in an invoice stating the correct amount. It will need to be paid for as long as it remains valid.

The second stage involves payment as part of the event. In this case, confirmation is used:

• cash payments, which are supported by cashier’s checks, receipts and blank forms. This method is rarely used in organisations because of the limitation of cash withdrawal in the amount of 100 thousand roubles. Cash withdrawal is carried out in the form of advance payment or accountable funds;
• electronic settlements, which involve the acquiring of a payment system, or for transfer from a current account on the basis of a bank statement.

The third stage is based on direct receipt of the product. If the product has been received and the service has been delivered to the buyer, this fact needs to be confirmed. The seller, in turn, must confirm that payment has been made. If confirmation is not submitted to the Federal Tax Service, the funds spent are not recognised as expenses. In order to obtain confirmation, the following must be submitted

• consignment notes for the goods
  • receipts for purchased goods;
  • receipts for work performed and services rendered.

Thus, each phase of a business transaction corresponds to a different set of documents.

Composition of primary documentation in the accounting department

According to the order of the Ministry of Finance of Russia, No. 62n, that was approved by the Russian Federal Accounting Standard 27/2021. It applies to all economic entities with the exception of budgetary organisations. Within the framework of the standard, rules on the preparation of primary documentation and accounting registers can be found.

Although transactions vary considerably from company to company, a standardised list of documents is used. Generally, the most familiar varieties are:

• contracts;
• invoices for payment;
• payments;
• consignment notes;
• acts interrelated with work or services;
• invoices.

This list is by no means exhaustive or definitive. Much depends on the type of transaction and the features adopted. The composition may vary considerably and only a basic list is given here.

How documentation is formed

The procedure for the formation of primary documents in accounting, which is reflected in the Federal Law “On Accounting” and independently drafted, is stipulated in a specific policy. The forms, once developed and adopted, may be gradually updated or supplemented, as they are not static.

The significant role is played by the moment of signing by the person who executes the transaction or transaction or who registers the event. This is the responsibility of the supplier at the time of the business activity or later. The data is recorded on paper and on physical media with an electronic signature.

Equally important is the notion of an exculpatory document, in which a statement of fact with the inclusion of details is recorded. Here it is possible to distinguish the recording of the civil law relations of an economic entity with employees, contractors, public authorities or in the management of economic units.

The exculpatory format is characterised by the following features:

• they are not aimed at the formation of facts of economic life and there are no strict requisites;
• identification does not contain information for book-keeping;
• they are not designed for primary accounting but contain the necessary requisites.

It appears that generally accepted standards apply to the design.

Errors and corrections

It is important not just to keep financial data, but to amend it when necessary, as instructed. The current requirements for making corrections with the processing of primary documents are presented in RFAS 27/2021, which will come into effect from 2022. Corrections may only be made by the persons responsible for the maintenance of the registers. There are certain rules:

• content of details in the format of date and signature of persons, positions with surnames and initials or other for the identification of persons;
  • corrections in electronic forms when completing a new form;
  • corrections by means of a correction on the form. Erroneous text or amount is crossed out and the correct text or figures are shown at the top. Corrections on paper are excluded;
  • correction of account entries involves a service entry or an additional entry. In the first case, an entry is made for an amount with a minus sign. In the second case, an amount is recorded, with the erroneous entry supplemented to the correct value.

The correction procedure is possible, but it is a subject to a strict regulation.

Requirements for documents on electronic media

According to the legislation, electronic format is equal to that contained on paper, as reported by the Federal Tax Service of the Russian Federation No. D-4-3/1984. In addition to important details the date which defines the taxation period is very important. The ES are visaed after the paper version has been drawn up. With automation in 1C, the process of storage and transfer is considerably reduced, as are the time and monetary costs.

The main requirement for storage and protection can be found in articles 248, 252, 313 and 314 of the Tax Code of the RF. They are kept in folders which are protected by passwords. They are only accessible to management staff. All amendments require reporting. According to Article 23.1.8 of the RF Tax Code, the organisation is obliged to keep the accounts for 4 years after they are submitted to the Federal Tax Service.

Upon completion, a simple ES and an enhanced ES are used. But, according to practical experience,     LSI and GOST requirements, the qualified reinforced one is recommended. The determination of signature types is stipulated by the agreement of economic components of the interaction participants. The corporate system is regulated according to the law “On electronic signature”. The use of ES in such systems is established by the system operator or the agreement among the participants.