Accounting for Beginners: Basics Every Business Should Know

What is double-entry bookkeeping and why it matters

Double-entry bookkeeping is the foundation of modern accounting. The principle is simple: every business transaction is recorded in at least two places — on a debit side and a credit side. If you sell a service for 10,000 MKD, it is recorded as revenue (credit) and as a receivable from the client or cash (debit). The sum of all debits must always equal the sum of all credits — this is the fundamental rule that ensures accuracy of the books. For small businesses in Macedonia, double-entry bookkeeping is a legal requirement for all legal entities (DOOEL, DOO). Only sole traders with lump-sum taxation are exempt from this obligation.

Chart of accounts: Your financial map

The chart of accounts is a list of all accounts used to classify financial transactions. It is organized into categories, and each account has a number and a name.

• Class 0-3: Assets — what the company owns: cash, receivables, equipment, inventory.
• Class 4: Liabilities — what the company owes: loans, payables to suppliers, taxes.
• Class 5: Equity — founding capital and accumulated profit.
• Class 6: Expenses — operating costs: salaries, rent, materials, services.
• Class 7: Revenue — income from sales of products and services.
• Class 8-9: Off-balance and closing accounts — special records for year-end.

Invoicing and expenses: The two pillars

Invoicing and expense tracking are the two fundamental pillars of day-to-day accounting. Every income must be backed by an invoice, and every expense must have a document (invoice, receipt, confirmation). In Macedonia, an invoice must contain mandatory elements: name and EDB of the issuer and recipient, date, description of the service or product, quantity, unit price, total amount, and VAT if you are a VAT taxpayer. Expenses must be related to business activity to be recognized by UJP. Personal costs cannot be deducted from the tax base.

• Each invoice must have a unique sequential number.
• The payment deadline must be stated on the invoice.
• Invoices must be stored for a minimum of 10 years.
• Expenses without documentation are not recognized by UJP.
• Mixing personal and business expenses is one of the most common mistakes.

Profit and loss statement and balance sheet

These two reports are the fundamental financial statements every business must understand. They tell the story of your company's financial health.

1. 1

   Profit & Loss Statement

   Shows the financial result for a given period — usually a month, quarter, or year. Simply put: revenue minus expenses equals profit (or loss). If your monthly revenue is 500,000 MKD and expenses are 350,000 MKD, your profit is 150,000 MKD. Corporate income tax of 10% is paid on this profit.

2. 2

   Balance Sheet

   Shows the financial position of the company at a specific point in time. It consists of three parts: assets = liabilities + equity. Assets are what you own (cash, equipment, receivables). Liabilities are what you owe (loans, payables to suppliers). Equity is the difference — the net worth of the company.

3. 3

   Cash Flow Statement

   Tracks the movement of cash — how much comes in and how much goes out. A company can be profitable on paper but have no cash to pay its bills. That is why cash flow monitoring is critical, especially for new businesses.

When to hire an accountant

Every business in Macedonia is required to keep books, but not every business needs to hire an accountant from day one. Here are the signs that it is time to seek professional help:

• You have more than 10-20 transactions per month — the volume becomes hard to manage on your own.
• You are VAT-registered — VAT calculations require precision and knowledge of the rules.
• You have employees — MPIN returns and payroll calculations are complex.
• Year-end is approaching — annual accounts and the DB-VP return require expert knowledge.
• You are growing fast — as volume grows, mistakes become more costly.

How Facturino simplifies accounting

Facturino was built to bridge the gap between full accounting knowledge and the needs of small businesses. You do not need to be an accountant to use it — the system automatically classifies transactions, calculates VAT liability, and generates reports that you or your accountant can use.

• Automatic classification of income and expenses according to the Macedonian chart of accounts.
• Real-time generation of profit and loss and balance sheet reports.
• VAT calculations and reports ready for submission to UJP.
• Share access with your accountant — no need to send folders.
• Data export in formats compatible with popular accounting software.