Accounting In Malta, Tips & Tricks


Regardless of how much money a company makes, efficient money management is one of the essential tools for successful businesses. A company’s books are the only accurate representation of financial information. KPIs (Key Performance Indicators) can be extracted from data which depicts revenue trends, profit-making operations, and loss-making ones. Should the books of any company be disorganized and inaccurate, such information would not be available. This will lead to important decisions being based on inaccurate or incomplete information, which may prove to be detrimental to the company’s success. 

In this article, we will be providing some tips and tricks on how to keep better accounting records in Malta. 

Good Accounting Starts with Sound Systems

Being organised helps keep your records accurate

Accounting is more than hiring a reliable accountant to handle the numbers for you.  Other soft skills have proven to be equally important. During this article, we will delve deeper into one particular skill, that of being organised. While this might sound obvious to you, we have noticed this skill to be lacking in so many entities.

Being organised is more than keeping documents neatly stacked on one’s desk. It involves having a consistent process in place and the necessary tools to enable you to communicate with your accountant consistently to enable your accountant to keep your records accurately. 

If you are a business owner or form part of a firm’s administration, you need to master this skill at all costs. It is not a complex process. All you need is to have a clear process on how to handle and store incoming documents as well as outgoing documents and eventually pass on such information in a timely and clear manner to your accountant. Whether you are an old-school individual and prefer to file everything in folders and boxes or you prefer to keep everything in soft copy, you need to have a consistent system. The complexity of such a system depends on the size of your business. Ultimately, an effective organisational system will save you time and money in the long term, whilst also achieving more reliable accounting information. 

We suggest the following: 

  • Revenue & Expenses

Store such documents in line with the VAT periods. Generally speaking, in Malta, VAT return preparations are required on a quarterly basis. Thus, storing accounting records quarterly would ease tracing back and forth invoices to compare them to specific VAT periods. Moreover, keep revenue and expense documents separately. 

If you have agreements for each customer and supplier, keep these stored either by the supplier, by due date etc.

For companies that have recurring clients or recurring suppliers, store their records separately and similarly categorise them as the rest of the documents.  

Once the system is in place, you would be able to locate specific information at ease. This would enable you instant insights along the way. Whether a recurring supplier increased their prices or if you want to know how much business you are generating with a specific client or within a given period, an organised system will give you all the information immediately.

  • Bank Statements

Bank statements should be provided in PDF and official format to your accountant whenever possible. This will come in handy during the audit stage. Also, highlight the bank statement’s start and end date. Again, there is no right or wrong way to do this. Should the company own multiple accounts, pass over the bank statements separately and do not put everything in one folder or PDF.

Moreover, if the company issues or receives cheques, or works with bulk deposits, attach any supporting documentation which will be available such as cheque images, a brief description of what the cheques are covering, and a deposit breakdown. By doing so, you are helping your accountant transform raw data (which on its own will be meaningless) into powerful information which tells you how your business is faring.

  • Other Documents 

Each company has different types of documents and it would be impossible for us to go through all the possible scenarios. However, whatever the nature of the documents, finding a suitable way how to store and pass on these documents to your accountant would always remain crucial. 

Keep Personal and Business Finances Separate

This is a common mistake made by nearly all start-ups. Although yes, it is easier and saves time to use personal bank accounts it has multiple drawbacks. Arguing that the most important thing is to get paid is not always correct. Some drawbacks to using personal bank accounts are: 

  • Puts you in direct contact with the business’s liabilities and debts
  • Business taxes and expenses come straight out of your savings and furthermore, it would be very difficult to determine which expenses were personal and which were incurred exclusively for the production of the income of your business
  • Complicates your accounting, as well as clarity of such accounting
  • May have a case where you are missing out on tax incentives

Further down the line, raising finance would be more difficult to attain as lending institutions wouldn’t know to filter between the company and personal income and expenditure.

Set aside for the Taxes

Though most business owners are aware of their tax liability, few plan ahead for the eventual tax payments. The problem here may arise when the owners discover that there is not enough cash to pay bills when tax season arrives. 

Having said this, we suggest that every business should set aside funds for taxes out of every income it generates. The exact amount varies from one business to the other. Other businesses opt to plan in different ways. For as long as one is aware of tax obligations and acts on setting funds aside, you will minimize problems with the taxman. 

Once again, the element of accurate bookkeeping plays a crucial part in budgeting for tax payments. Having the right information at hand will enable you to budget accordingly and accurately. Over budgeting for tax payments may lead to missing opportunities whereas underbudgeting will mean that you will run into trouble with the tax authorities.


Proper budgeting is an important cornerstone of your business’ success

Failing to plan is planning to fail.  Below is the budgeting planning process. 

pngTypically, business owners tend to focus a lot on step 5, however, all the steps are crucial for budgeting. 

Reasons for producing a budget include; planning, coordination, communication, motivation, control and evaluation. 

Stages in the Budgeting Process:

  1. Communicate the details of budget policy and guidelines to those responsible for budget preparation
  2. Factors that restrict output are determined
  3. Prepare sales budget 
  4. Initial preparation of budget 
  5. Negotiate budget with higher management 
  6. Co-ordination and budget reviews 
  7. Final acceptance of budgets 
  8. Ongoing reviews of budgets 

Also, establish the budget period

  • Strategic Planning (Long-Term Planning) Covers periods longer than 1 year for formulating, evaluating, and selecting strategies. 
  • Budgetary Planning (Short-Term Planning) Generally covers 1 year for company functions, activities and departments. Converts the strategic plan into action. 
  • Operation Planning (Very Short-Term or Day-to-Day Basis) How will company resources be used. Converts budgetary planning into action. 


Other than the conventional types of budgeting one can also investigate the use of other techniques such as Activity-Based Budgeting, Beyond Budgeting, and Zero-Based Budgeting.

Yet, the biggest pitfall in budgeting is not the lack of budgeting but the lack of constantly monitoring your budget with actual data. When a business is budgeting for a project or in general, it is likely to turn to historical information to serve as a robust source of information. However, budgets are always future-looking and one needs to compare the budgets with the actuals to analyse the performance and accuracy of the budget process. Any variances should be investigated. Once more to be able to budget properly, you need both past data accurately recorded as well as future data.

If you are new at running your business or you would like to entrust your accounting to a trustworthy partner, at Borg Galea & Associates we work hard to ensure that the right systems and processes are in place. We tailor make our approach to all of our clients to ensure that we always exceed the clients’ expectations and to ensure that the right data is constantly kept. To learn more about how our services might come in handy, do not hesitate to contact us.


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